The economy experiences a decrease in the price level and an increase in real domestic output.Which is a likely explanation?
A)consumer incomes and the quantity of labour have decreased
B)interest rates and wage rates have decreased
C)the prices of imported resources have increased
D)national income abroad has increased

Question

Quizplus · Accepted Answer

If interest rates and wage rates have decreased, it could lead to an increase in investment and consumption spending, which would increase real domestic output. Additionally, a decrease in wage rates would allow firms to offer lower prices, decreasing the price level.

The Economy Experiences a Decrease in the Price Level and an Increase