Identify the Correct Statement

question 44

Multiple Choice

Identify the correct statement.

• A)An increase in the price level in an economy will increase the real value of dollar-denominated assets.
• B)An increase in the price level in an economy will shift the aggregate expenditure line upward.
• C)An increase in the price level in an economy will decrease the equilibrium level of output demanded.
• D)An increase in the price level in an economy will cause an upward movement along the aggregate demand curve.
• E)An increase in the price level in an economy will shift the aggregate demand curve rightward.

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Definitions:

Social Optimum

A state in which resources are allocated in the most efficient way from the perspective of society as a whole.

Economic Efficiency

A state where all resources in an economy are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Transaction Cost

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges.

Externality Problem

A situation in which a third party is affected by the consequences of a transaction or activity between others, either positively or negatively.