If the price level decreases,
A)the aggregate expenditures line shifts downward; the economy moves down along the aggregate demand curve
B)the aggregate expenditures line shifts upward; the economy moves up along the aggregate demand curve
C)the aggregate demand curve shifts to the right; the economy moves along the aggregate expenditures line
D)the aggregate demand curve shifts to the left; the economy moves along the aggregate expenditures line
E)the aggregate expenditures line shifts upward; the economy moves down along the aggregate demand curve

Question

Quizplus · Accepted Answer

When the price level decreases, the aggregate expenditures line shifts upward due to increased real wealth and purchasing power, leading to higher consumption and investment. Simultaneously, the economy moves down along the aggregate demand curve as the quantity of goods and services demanded increases at lower price levels.

If the Price Level Decreases