A decrease in the overall price level in the economy leads to all of the following EXCEPT:
A) an increase in consumption spending.
B) an increase in the interest rate.
C) an increase in its exports.
D) a decrease in its imports.

Question

Quizplus · Accepted Answer

A decrease in the overall price level in the economy typically leads to lower interest rates, not higher. Lower prices can increase the purchasing power of money, which can lead to increased consumption and potentially more exports (as goods become cheaper for foreign buyers) and fewer imports (as domestic buyers find domestic goods more attractive).

A Decrease in the Overall Price Level in the Economy