The Theoretical Proposition That the Price Level Is Just a Numeraire

question 176

Multiple Choice

The theoretical proposition that the price level is just a numeraire and should not affect aggregate expenditures suggests the AD curve is:

• A)downward sloping.
• B)horizontal.
• C)vertical.
• D)upward sloping.

---

Definitions:

Economic Model

A simplified representation, often mathematical, of economic processes, relationships, or phenomena, to predict and explain economic behavior.

Incorrect Predictions

refers to forecasts or expectations about future events or trends that ultimately prove to be wrong.

Economic Decision Makers

Economic Decision Makers are individuals or groups, such as consumers, businesses, and governments, that make choices about what to consume, produce, and distribute in an economy.

Economic Theory

A set of principles and concepts that explain the functioning of economies, guiding the analysis of economic policies and practices.