A decrease in the price level will
A)shift the aggregate expenditure line upward
B)shift the aggregate expenditure line downward
C)cause a movement up along the aggregate expenditure line
D)cause a movement down along the aggregate expenditure line
E)have no effect on the aggregate expenditure or the equilibrium level of real GDP

Question

Quizplus · Accepted Answer

A decrease in the price level increases the real value of money, leading to higher consumption and investment, which shifts the aggregate expenditure line upward.

A Decrease in the Price Level Will