A Decrease in the Price Level in an Economy Implies

question 138

Multiple Choice

A decrease in the price level in an economy implies that _____.

• A)the spending multiplier will be equal to the marginal propensity to consume
• B)there will be an increase in investment
• C)there will be a decrease in investment
• D)the value of the spending multiplier will be equal to one
• E)the value of the spending multiplier will be equal to zero

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Definitions:

Trial Balance Column

A report that lists the balances of all general ledger accounts at a particular point in time, serving as a tool for verifying the total debits equal total credits in the accounting system.

Trial Balance Preparation

The process of compiling the balances of all ledgers into debit and credit columns to ensure that the total debits equal total credits in financial accounting.

Account Balance

The sum of money available in a financial account at a specific moment.

Trial Balance

A trial balance is a bookkeeping worksheet wherein the balances of all ledgers are compiled into debit and credit account columns to ensure total debits equal total credits.