If the Actual Price Level in the Macro Economy Is

question 65

Multiple Choice

If the actual price level in the macro economy is below the equilibrium price level:

• A) excess demand will drive prices back up to the equilibrium price
• B) excess demand causes the demand curve to move inwards
• C) excess demand causes the demand curve to move outwards
• D) excess supply will drive prices back up to the equilibrium price

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Definitions:

Parallelogram

A four-sided figure with opposite sides parallel and equal in length.

Rhombus

A four-sided shape where all sides have equal length, but unlike a square, the angles are not necessarily 90 degrees.

Jointly Exhaustive

A term describing a set of options or possibilities that covers all potential outcomes or conditions without overlap.

Mutually Exclusive

Two or more events that cannot happen at the same time; if one occurs, the other cannot.