A Decrease in the Price Level in the Aggregate Expenditures

question 178

Multiple Choice

A decrease in the price level in the aggregate expenditures model would:

• A)decrease aggregate expenditures and real GDP.
• B)increase aggregate expenditures and real GDP.
• C)decrease aggregate expenditures and increase real GDP.
• D)increase aggregate expenditures and decrease real GDP.

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Definitions:

Premiums

Payments made by individuals or businesses to insurance companies in exchange for coverage against specified risks.

Deductible

An amount of any loss that is to be paid by the insured.

Inflationary Times

Periods characterized by a general increase in prices and fall in the purchasing value of money.

Insurance Policies

Contracts between an insurer and a policyholder, outlining the terms under which the insurer agrees to pay a benefit upon the occurrence of a specified risk or event.