A fall in the price level
A) increases the real value of money balances, which causes borrowing to decrease, leading to a decrease in investment and total planned real expenditures.
B) causes exports to rise and imports to fall, leading to an increase in total planned real expenditures.
C) leads to an increase in total planned real expenditures because of the indirect effect.
D) causes total planned real expenditures to increase as long as the fall is less than the fall in the price level in other countries.
B
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Assume that there is an excess supply of euros in the foreign exchange market. If a fixed exchange rate system exists with the United States, the European Central Bank would have to __________ to prevent the euro from __________
A) buy excess euros; appreciating B) buy excess euros; depreciating C) sell euros; appreciating D) sell euros; depreciating
One reason regulators push for higher prices in an industry is to
a. prevent excess profits in the industry. b. protect the public from excessively low prices. c. encourage usage of the good or service. d. protect against the demise of existing firms.
The main component of the monetary union created by the Treaty of Maastricht is a(n)
a. single currency. b. gold standard. c. bilateral barter system of currencies. d. unified stock market.
The calculation of GDP would include
What will be an ideal response?