Which of the Following Is Incorrect

question 32

Multiple Choice

Which of the following is incorrect?

• A)As the U.S.price level rises, U.S.goods become relatively more expensive so that U.S.exports fall and U.S.imports rise.
• B)As the price level falls, the demand for money declines, the interest rate declines, and interest-rate-sensitive spending increases.
• C)When the price level increases, real balances increase and businesses and households find themselves wealthier and therefore increase their spending.
• D)Given aggregate demand, an increase in aggregate supply increases real output and, assuming downward-flexible prices, reduces the price level.

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Definitions:

Horizontal Axis

In a graph or chart, the x-axis, which typically represents the independent variable or scale of measurement.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at set prices.

Price Of Scone

The amount of money charged for a single scone, determined by factors like production costs, demand, and supply.

Rises

Rises refers to an increase or upward movement in quantity, value, or level of a given entity or phenomena.