Can a Change in the Price Level Change Aggregate Demand

question 35

Multiple Choice

Can a change in the price level change aggregate demand?

• A) Yes, as the price level rises, aggregate demand falls.
• B) Yes, but only under the condition that the real balance effect is operational.
• C) No, only a change in a nonprice factor can change aggregate demand.
• D) No, a change in the price level can only change aggregate supply.
• E) none of the above

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Definitions:

Scattergram

A graphical representation using dots to show the relationship or distribution of two variables, often used in statistics and data analysis.

Absolute Data

Quantitative information that is completely independent of other numbers, providing specific facts rather than relative or comparative metrics.

Relative Data

Information that is pertinent or relevant in comparison to another set of data, often used to analyze relationships or trends.

Earning Gap

The disparity in income between different demographics, such as between genders or races, often pointing to issues of inequality or discrimination in the workforce.