An increase in the price level might cause:
A. a decrease in the quantity of aggregate demand because of the substitution effect.
B. a decrease in the quantity of aggregate demand because of the interest rate effect.
C. an increase in the quantity of aggregate demand because of the multiplier effect.
D. an increase in the quantity of aggregate demand because of the money wealth effect.
Answer: B
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A perfectly competitive firm does not try to sell more of its product by lowering its price below the market price because
A. its competitors would not permit it. B. its demand curve is inelastic, so total revenue will decline. C. this would be considered unethical price chiseling. D. it can sell all it wants to at the market price.
Which of the following "factors of production" is included in the neoclassical growth theory?
A) skills and education of the workforce B) cultural attitudes toward work C) effectiveness of the legal system in protecting property rights D) labor measured in units of effective labor E) all of the above
A leftward shift in the demand curve is called:
a. a decrease in demand. b. an increase in demand. c. a decrease in output. d. an increase in income.
The term scarcity in economics refers to the fact that:
a. No country can produce enough products to satisfy everybody's economic wants b. Even in the richest country some people go hungry c. Economic wants are limited and resources are abused d. It is impossible to produce too much of any particular good or service in a market economy