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Which of the Following Is Incorrect

Question 54

Multiple Choice

Which of the following is incorrect?


A) As the American average price level rises,American goods become relatively more expensive so that our exports fall and our imports rise.
B) As the average price level falls,the interest rate declines,and interest-rate sensitive spending increases.
C) When the average price level increases,real balances increase,businesses and households find themselves wealthier and therefore increase their spending.
D) An increase in aggregate supply tends to increase real domestic output and reduce the average price level.

Correct Answer:

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