When the Average Price Level of a Country Rises, Which

question 83

Multiple Choice

When the average price level of a country rises, which of the following would NOT cause a drop in the total amount of the country's goods and services that would be purchased?

• A) The money that people hold will have less purchasing power than it had before the price level changed.
• B) A higher price level causes interest rates to rise, which causes purchases to fall for the kinds of items that typically are bought on credit.
• C) When the price level rises in country A but not in country B, citizens of country B will be less likely to import products from country A, leading to a reduction in country A's net exports.
• D) The higher price level leads to higher wages, which raise the costs of production for firms.

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Definitions:

Mutually Exclusive

Two events that cannot happen at the same time, requiring a choice to be made between them.

Legal Fees

Charges for services provided by lawyers or law firms.

Project Analysis

The process of evaluating the viability and profitability of a proposed project or investment.

Grading Costs

Expenses associated with evaluating and categorizing assets or investments based on their quality, condition, or potential risks.