Other Things Being Equal, When the Domestic Price Level Falls

question 55

Multiple Choice

Other things being equal, when the domestic price level falls exogenously,

• A)the aggregate expenditure function shifts downward.
• B)imports of foreign goods rise.
• C)the net export function shifts downward.
• D)Canadian goods become more expensive relative to foreign goods.
• E)the net export function shifts upward.

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Definitions:

Personal Property

Assets belonging to an individual that are movable, excluding real estate or land.

Fines Paid

Monetary charges imposed as a penalty for breaking laws or regulations, generally not deductible for tax purposes.

Deductible

An expense that can be subtracted from gross income to reduce the amount of income subject to tax.

More-Than-50% Business-Use Test

A criterion used for determining whether an asset is used primarily for business, requiring that over 50% of its use is for business to qualify for certain tax deductions.