What could cause a decrease in the price level and simultaneously an increase in GDP similar to the 1920s in the United States?
A) an increase in interest rates
B) a decrease in consumer confidence
C) an increase in productivity
D) a decrease in interest rates

Question

Quizplus · Accepted Answer

An increase in productivity can cause a decrease in the price level and an increase in GDP, similar to the 1920s in the United States when there was a significant increase in productivity due to technological advancements in manufacturing and transportation, leading to a decrease in prices and an increase in production. The other options, such as an increase or decrease in interest rates, or a decrease in consumer confidence, would have different effects on the economy.

What Could Cause a Decrease in the Price Level and Simultaneously