Which of the following describes an economy's price level?
A)The cost of producing goods and services using domestically owned factors of production
B)The year-to-year change in nominal GDP
C)The year-to-year change in the price of consumer goods
D)The total price of aggregate output
E)The average price of aggregate output

Question

Quizplus · Accepted Answer

The price level is the average price of all goods and services produced in an economy. Therefore, the best choice is E, which describes the average price of aggregate output.

Which of the Following Describes an Economy's Price Level