An Increase in the Price Level

Multiple Choice

An increase in the price level

A) increases the real value of money balances which causes borrowing to decrease,leading to a decrease in investment and the quantity demanded of aggregate output.
B) causes exports to fall and imports to rise,leading to an decrease in quantity demanded of aggregate output.
C) leads to an increase in the quantity of aggregate output because of the open economy effect.
D) causes the quantity demanded of aggregate output to increase as long as the fall is less than the fall in the price level in other countries.