A reason why an increase in the price level decreases the quantity of real GDP demanded is that
A) the buying power of money increases.
B) potential GDP decreases.
C) the price of domestic goods and services increases relative to foreign goods and services.
D) the real interest rate falls.
E) the inflation rate decreases.
C
You might also like to view...
As of 2002 the European Union has announced that 10 new members will be allowed to join the union? Which of the following countries is included in that group?
A) Poland B) Russia C) Turkey D) All of the above.
If Ben values good X more than good Y, and Catherine values good Y more than good X, a firm can increase its profits by
A) charging the same price for both goods. B) bundling the goods. C) selling the goods in a competitive market. D) charging one price per good.
When saving is negative, the value of the marginal propensity to save is negative
Indicate whether the statement is true or false
Which of the following constitutes an implicit cost to the Johnston Manufacturing Company?
A. Rent paid for the use of equipment owned by the Schultz Machinery Company B. Payments of wages to its office workers C. Economic profits resulting from current production D. Depreciation charges on company-owned equipment