There is a general overall __________ relationship between the price level and ____________.
A) negative; aggregate expenditures
B) positive; aggregate expenditures from the government
C) negative; nominal expenditures from the government
D) positive; nominal expenditures from households

Question

Quizplus · Accepted Answer

There is a negative relationship between the price level and aggregate expenditures because as the price level increases, the purchasing power of consumers decreases and they are less likely to spend. This in turn leads to a decrease in aggregate expenditures.

There Is a General Overall __________ Relationship Between the Price