Which of the following is a reason why decreases in the price level result in a rise in aggregate expenditure?
A) Price level decreases cause firms and consumers to hold less money,which lowers the interest rate.Lower interest rates raise consumption and planned investment expenditures,which raises aggregate expenditure.
B) Price level decreases reduce real wealth,which causes consumption spending and aggregate expenditure to rise.
C) As the price level falls,government spending rises,which raises aggregate expenditure.
D) Price level decreases in the United States relative to other countries' lower net exports,which raises aggregate expenditure.
Correct Answer:
Verified
Q252: Table 12-15 Q253: Which of the following correctly describes how Q254: What is the formula for the multiplier? Q255: Would a larger multiplier lead to longer Q256: The larger the MPC,the smaller the value Q258: Economists think that the marginal propensity to
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents