The Canadian Price Level Rises

question 20

Multiple Choice

The Canadian price level rises.What is the effect on the quantity of real GDP demanded or aggregate demand in Canada?

• A)The quantity of Canadian real GDP demanded increases.
• B)The quantity of Canadian real GDP demanded decreases.
• C)Canadian aggregate demand increases.
• D)Canadian aggregate demand decreases.
• E)There is no change to either the quantity of Canadian real GDP demanded or to Canadian aggregate demand.

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Definitions:

Rational Consumers

Individuals who aim to maximize their utility or satisfaction from consumption under the constraints of their budget.

Complete Preferences

A concept in economics where an individual's preferences over a set of goods or outcomes are fully defined, allowing for every pair of outcomes to be compared.

National Unemployment Rate

A measure of the percentage of the labor force that is unemployed and actively seeking employment, often used as a key indicator of the health of a country's economy.

Anchoring Effect

A cognitive bias where an individual's decisions are influenced by a particular reference point or "anchor," sometimes leading to irrational decision-making.