Which of the following best explains an increase in consumer spending?
A)People spend more when the price level rises, because the dollars they hold worth more.
B)People spend more when the price level rises, because the dollars they hold worth less.
C)People spend more when the price level falls, because the dollars they hold worth more.
D)People spend more when the price level falls, because the dollars they hold worth less.

Question

Quizplus · Accepted Answer

When the price level falls, the purchasing power of money increases, meaning the dollars people hold are worth more, leading to increased consumer spending.

Which of the Following Best Explains an Increase in Consumer