A Decrease in the Price Level Makes Consumers Feel Wealthier

question 160

True/False

A decrease in the price level makes consumers feel wealthier, so they purchase more. This logic helps explain why the aggregate demand curve slopes downward.

---

Definitions:

Monthly Salary

Regular payments made to an employee, usually at the end of each month, as compensation for work performed.

Strip Bond

A financial security that represents a portion of the interest or principal of a bond, which has been separated to be sold individually.

Compounded Semiannually

This refers to the process of calculating interest on both the initial principal and the accrued interest from previous periods, done twice a year.

Maturity Date

The specified date on a financial instrument at which the principal (and usually the final interest payment) is due to be paid.