When the Price Level Falls

question 2

Multiple Choice

When the price level falls,

• A)there is a movement downward along the AS curve.
• B)both the potential GDP line and the AS curve shift leftward.
• C)there is a movement upward along the AS curve.
• D)the AS curve shifts rightward but the potential GDP line does not shift.
• E)the AS curve shifts leftward but the potential GDP line does not shift.

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Definitions:

Treaty of Ghent

The peace treaty that ended the War of 1812 between the United States and the United Kingdom, signed on December 24, 1814.

Embargo Act

A law passed by the United States Congress in 1807 that prohibited American ships from trading in all foreign ports, aiming to avoid conflicts.

U.S.-Canada Border

The international boundary between the United States and Canada, recognized as the longest undefended border in the world, spanning various terrains and facilitating cross-border movement.