Suppose the Price Level Falls

question 46

Multiple Choice

Suppose the price level falls. The result is that the:

• A) aggregate supply curve would shift to the right.
• B) aggregate supply curve would shift to the left.
• C) general price level would rise causing a movement up the aggregate demand curve.
• D) aggregate demand curve would slope downward because of the real balances effect.

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Definitions:

Poisson Distribution

A discrete probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, given the average number of times the event occurs over that interval.

Binomial Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or assumptions.

Tornado Chart

A type of bar chart used in sensitivity analysis to compare the relative importance of different variables.

Market Size

The total volume or value of sales within a market over a specific time period.