Changes in the Price Level Necessarily Cause the Quantity Demanded

question 29

Multiple Choice

Changes in the price level necessarily cause the quantity demanded to change in the opposite direction to maintain the level of income. This effect is called which of the following?

• A)the wealth effect
• B)the constant-nominal-income effect
• C)the substitution-of-foreign-goods effect
• D)the investment effect

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Definitions:

Brake Drum

A component of a drum brake system, where brake shoes press against the interior to create friction and slow down the vehicle.

Kinetic Energy

The energy of motion.

Mechanical Action

The physical movement or force applied by machinery or mechanical components to perform a function.

Vehicle Brake System

A mechanism in a vehicle that enables it to slow down or come to a complete stop.