How Will a Decrease in the Price Level Affect the Aggregate

question 89

Multiple Choice

How will a decrease in the price level affect the aggregate demand curve?  

• A) It will shift the aggregate demand curve to the left. 
• B) It will shift the aggregate demand curve to the right. 
• C) It will result in a movement up and to the left along the aggregate demand curve. 
• D) It will result in a movement down and to the right along the aggregate demand curve.

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Definitions:

Purchasing Power

The ability of an individual or group to buy goods or services, often considered in relation to the amount of goods or services that one's money can buy.

Urban Population

The segment of a country's population that resides within towns and cities as defined by governmental standards.

Population Growth

An increase in the number of people that reside in a country or region over a specific period of time.

Infrastructure

The fundamental facilities and systems serving a country, city, or area, including transportation and communication systems, water and power lines, and public institutions like schools and hospitals.