Asked by
Tania White
on Nov 11, 2024
Verified
A decrease in the price level in an economy implies that _____.
A) the spending multiplier will be equal to the marginal propensity to consume
B) there will be an increase in investment
C) there will be a decrease in investment
D) the value of the spending multiplier will be equal to one
E) the value of the spending multiplier will be equal to zero
Spending Multiplier
A factor by which a change in spending translates into a greater change in income and output throughout the economy.
Price Level
The calculated average price across the broad spectrum of goods and services in an economy.
- Acknowledge the effects of price level changes on aggregate demand, aggregate supply, and aggregate expenditure.
Verified Answer
MV
Learning Objectives
- Acknowledge the effects of price level changes on aggregate demand, aggregate supply, and aggregate expenditure.
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