Which of the Following Is a Reason Why Decreases in the Price

Multiple Choice

Which of the following is a reason why decreases in the price level result in a rise in aggregate expenditure?

A) Price level decreases cause firms and consumers to hold less money, which lowers the interest rate.Lower interest rates raise consumption and planned investment expenditures, which raises aggregate expenditure.
B) Price level decreases reduce real wealth, which causes consumption spending and aggregate expenditure to rise.
C) As the price level falls, government spending rises, which raises aggregate expenditure.
D) Price level decreases in the United States relative to other countries lower net exports, which raises aggregate expenditure.
E) As the price level falls, households become more optimistic about the future.