Other things the same,an increase in the price level makes consumers feel
A)less wealthy,so the quantity of goods and services demanded falls.
B)less wealthy,so the quantity of goods and services demanded rises.
C)more wealthy,so the quantity of goods and services demanded rises.
D)more wealthy,so the quantity of goods and services demanded falls.

Question

Quizplus · Accepted Answer

An increase in the price level reduces the purchasing power of consumers. This can lead to a decrease in their wealth perception, which subsequently reduces the quantity of goods and services demanded. Therefore, choice A is the best option.

Other Things the Same,an Increase in the Price Level Makes