There is a negative relationship between the price level and which components of GDP?
A) C, I, and G
B) I, G, and NX
C) C, G, and NX
D) C, I, and NX

Question

Quizplus · Accepted Answer

When the price level increases, the purchasing power of consumers and investors decreases, leading to a decrease in consumption (C) and investment (I). Additionally, an increase in prices can discourage exports and encourage imports, leading to a decrease in net exports (NX). Therefore, the components of GDP that have a negative relationship with the price level are consumption (C), investment (I), and net exports (NX).

There Is a Negative Relationship Between the Price Level and Which