Let me tell you what some other people say, though: 1  The EWGâs Skin Deep Database lists it as a 5-6 (or moderate hazard), but trying to find the studies they used for their rating proved difficult, and the ones I did find were the nebulous âborax or boric acidâ test studies.
1 This is so because, my nominal wages have increased by 10% while the average price level (CPI) has increased by only 5%. 2  Thus today (in 2010) with my higher nominal wage ($1100.00) I can buy more than I could buy last year.
When the price level falls, consumers are wealthier, a condition which induces more consumer spending. Thus, a drop in the price level induces consumers to spend more, thereby increasing the aggregate demand. The second reason for the downward slope of the aggregate demand curve is Keynes's interest-rate effect. Recall that the quantity of money demanded is dependent upon the price level. That is, a high price level means that it takes a relatively large amount of currency to make purchases.