An Increase in the Price Level Makes Consumers Feel Less

question 62

Multiple Choice

An increase in the price level makes consumers feel less wealthy.How is this situation represented?

• A) Aggregate demand shifts right.
• B) Aggregate demand shifts left.
• C) There is a movement to right along a given aggregate-demand curve.
• D) There is a movement to the left along a given aggregate-demand curve.

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Definitions:

Contract Price

The agreed amount of money for the exchange of goods, services, or property specified in a contract.

Initiation

The act of beginning or starting something, such as a process, project, or activity.

Maturity

Specified date at which the principal amount of a bond is paid.

Payoff Profile

A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.