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:

Constrict

To constrict means to narrow or become tighter, often referring to the reduction in diameter of blood vessels or other tubular structures in the body.

Splanchnic Nerve

Nerves that innervate the viscera, transmitting information to and from the visceral organs to the central nervous system.

Sympathetic Chain

A part of the autonomic nervous system consisting of a series of ganglia that run alongside the spinal column and influence internal organs by releasing neurotransmitters.

Collateral Ganglia

Sympathetic ganglia at the origin of large abdominal arteries; include the celiac, superior, and inferior mesenteric arteries; also called prevertebral ganglia.