3. Why the aggregate The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 140, and the quantity of output demanded is $300 billion. Moving down along the aggregate demand curve from point A to point B, the price level falls to 120, and the quantity of output demanded rises to $500 billion. 10 180 1 PRICE LEVEL 8. 130 110 AD 8 $ 700 400 500 OUTPUT (illions of dollars) As the price level falls, the purchasing power of households' real wealth will ..This phenomenon is known as the causing the quantity of output demanded to affect Additionally, as the price level falla, the impact on the domestie interest rate will cause the real value of the dollar to in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will therefore and the number of foreign products purchased by domestic consumers and firm (imports) will .Net exports will therefore Gusing the quantity of domestic output demanded to This phenomenon is known as the effect