Suppose total planned expenditures equal $20 trillion when the value of the price level is 100. If the price level drops to 90, total planned real expenditures will equal
A)$20 billion.
B)less than $20 trillion.
C)more than $20 trillion.
D)None of the above: Cannot be determined without additional information.

Question

Quizplus · Accepted Answer

When the price level drops, the real value of money increases, leading to an increase in real expenditures as consumers and businesses can purchase more goods and services with the same amount of money.

Suppose Total Planned Expenditures Equal $20 Trillion When the Value