Why Does an Increase in the Price Level Result in a Decrease

question 248

Multiple Choice

Why does an increase in the price level result in a decrease in the aggregate quantity of goods and services demanded?

• A) because as wealth rises, interest rates rise, and the dollar appreciates
• B) because as wealth rises, interest rates fall, and the dollar depreciates
• C) because as wealth falls, interest rates rise, and the dollar appreciates
• D) because as wealth falls, interest rates fall, and the dollar depreciates