Multiple Choice
An increase in the price level results in a decline in aggregate demand because higher prices will cause the nominal interest rates to increase and GDP to drop. This effect is called the:
A) wealth effect.
B) trade effect.
C) income effect.
D) interest rate effect.
Correct Answer:
Verified
Correct Answer:
Verified
Q2: The marginal propensity to consume is always
Q3: Using aggregate demand and aggregate supply curves,
Q4: The four components of the aggregate demand
Q5: Aggregate demand refers to the demand for
Q6: In the short- run, an increase in
Q8: When output falls below full employment output,
Q9: If the marginal propensity to consume is
Q10: Compared to the long run aggregate supply
Q11: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5231/.jpg" alt=" Figure 9.4 -Refer
Q12: List three things that could shift the