In the Aggregate Demand-Aggregate Supply Model,an Increase in the Price

question 166

Multiple Choice

In the aggregate demand-aggregate supply model,an increase in the price level will

• A) increase money demand,raise the interest rate,reduce aggregate expenditure,and decrease equilibrium real GDP
• B) decrease money demand,lower the interest rate,increase aggregate expenditure,and increase real GDP
• C) increase the money supply,lower the interest rate,increase aggregate expenditure,and increase real GDP
• D) decrease the money supply,raise the interest rate,reduce aggregate expenditure,and decrease real GDP
• E) not change money supply,money demand or the interest rate,but will shift the aggregate demand curve to the right

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Definitions:

Replenishment Orders

Orders placed to restock inventory to a desired level, ensuring the availability of products for continued sales or production.

Cycle Inventory

The portion of inventory that is planned to be sold in a given cycle, as part of the regular pattern of ordering and selling goods.

Forward Buying

Purchasing inventory in larger quantities than immediately needed, often in anticipation of price increases or high demand periods.

Lot Size

The quantity of items that are produced, purchased, or moved in a single batch or order.