Respuesta :
As the price level falls people feel as if they have more money, so they spend more, this event influences the Aggregate Demand.
Aggregate demand shows the total amount of money people willing to spend to purchase some amount of goods and services at a specific price level and point in time.
As the price level falls, people feel as if they have more money. This condition is called as The Wealth Effect. People will feel that they become reacher even if their income is actually the same as before.
The Wealt Effect is responsible to shift the aggregate demand because:
- People tends to increase their consumption as they have more money to spend.
- People will try to shift some of their usual commodities to the "higher-class" commodities because they feel those exclusive goods and services are no longer expensive.
Learn more about Aggregate Demand and Wealth Effect here: https://brainly.com/question/27992948
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