Which of the Following Would Likely Cause an Upward Parallel

question 61

Multiple Choice

Which of the following would likely cause an upward parallel shift in the AE curve and a rightward shift in the AD curve?

• A)a decrease in the price level
• B)a reduction in government purchases
• C)an increase in the price level
• D)an increase in the MPC
• E)an increase in the business confidence of firms

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Definitions:

Imported Raw Materials

Raw or unprocessed goods brought into a country from abroad for use in manufacturing or production.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a given year, expressed in base-year prices.

Nominal GDP

GDP based on prices prevailing at the time of production.

Price Level

A measure of the average prices of goods and services in an economy at a specific point in time.