How does a reduction in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?

A. The C + I + G + X curve shifts up, thereby reducing the equilibrium level of real GDP.
B. The C + I + G + X curve shifts down, thereby increasing the equilibrium level of real GDP.
C. The C + I + G + X curve shifts up, thereby increasing the equilibrium level of real GDP.
D. The C + I + G + X curve shifts down, thereby reducing the equilibrium level of real GDP.


Answer: C

Economics

You might also like to view...

Since sunk costs are incurred no matter what:

A. they are relevant in deciding how much to produce. B. they are essential in the profit-maximizing sales quantity formula. C. they can generally be ignored in making economic decisions. D. they are considered fixed costs.

Economics

In 2010, the real GDP and population of Zincona were $200 million and 5 million, respectively. If the number of farmers in the economy was 0.001 million and the number of government employees was 0.01 million, then Zincona's real GDP per worker was _____ in 2010

a. $40.2 b. $50 c. $30.8 d. $60

Economics

Companies will often spend considerable amounts of money to create a ________with respect to their brand name.

A. reputation effect B. product orientation C. relational effect D. market effect

Economics

With average cost pricing, the monopolist

A) earns no accounting profit. B) produces where P = MC. C) earns a normal rate of return for its shareholders. D) does not cover opportunity costs.

Economics