Which of the following is not an effect that occurs when the general price level in our economy increases?
A) The purchasing power of people's savings will increase.
B) The interest rate will also tend to increase.
C) Foreign buyers will buy less of our output, and we tend to import more.
D) Our net exports will tend to decrease.

Question

Quizplus · Accepted Answer

The increase in the general price level in our economy results in a decrease in the purchasing power of people's savings, not an increase. Therefore, option A is not an effect that occurs when the general price level in our economy increases. Options B, C, and D are all effects that occur when the general price level in our economy increases.

Which of the Following Is Not an Effect That Occurs