Suppose total planned expenditures equal $50 trillion when the value of the price level is 100. If the price level drops to 90, total planned real expenditures will equal
A) $50 billion.
B) less than $50 trillion.
C) more than $50 trillion.
D) None of the above: Cannot be determined without additional information.

Question

Quizplus · Accepted Answer

When the price level drops, the value of money increases, allowing consumers and businesses to purchase more with the same amount of money. This typically leads to an increase in total planned real expenditures.

Suppose Total Planned Expenditures Equal $50 Trillion When the Value