Which of the following is a reason why decreases in the price level result in a rise in aggregate expenditure?
A) Price level decreases cause firms and consumers to hold less money, which lowers the interest rate. Lower interest rates raise consumption and planned investment expenditures, which raises aggregate expenditure.
B) As the price level falls, government spending rises, which raises aggregate expenditure.
C) Price level decreases in the United States relative to other countries' lower net exports, which raises aggregate expenditure.
D) Price level decreases reduce real wealth, which causes consumption spending and aggregate expenditure to rise.
A
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The process in which a cycle of falling asset prices and falling prices of goods and services can increase the severity of an economic downturn is called:
A) financial crisis B) bank run C) sovereign debt crisis D) debt-deflation process
The price elasticity of demand
A) depends on the units in which quantity is measured. B) depends on the units in which price is measured. C) depends on the units in which money is measured. D) is independent of the units in which quantity and price are measured.
Which of the following is true of the inflation rates experienced by different countries around the world in the 1990s?
a. China experienced deflation during this period b. Russia experienced hyperinflation during this period c. Japan experienced an inflation rate of 24 percent during this period d. The United Kingdom experienced deflation during this period
Patents, copyrights, and trademarks
a. are examples of government-created monopolies. b. allow their owners to reduce the costs of what they produce. c. generate more revenue for the government than they cost consumers in the form of higher prices. d. All of the above are correct.