What Are the Effects of a Decrease in the Price

question 168

Multiple Choice

What are the effects of a decrease in the price level?

• A) Wealth falls, people lend less, interest rates fall, and the dollar appreciates.
• B) Wealth falls, people lend less, interest rates rise, and the dollar depreciates.
• C) Wealth rises, people lend more, interest rates rise, and the dollar appreciates.
• D) Wealth rises, people lend more, interest rates fall, and the dollar depreciates.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of the operation increases.

Exclusive Franchise

A business arrangement granting a single entity the right to market a company's goods or services within a specified territory.

Deregulation

The process of reducing or eliminating government controls or restrictions on industries to promote efficiency and competition.

Industrial Regulation

Policies and rules implemented by governments to control or manage the activities, standards, and behaviors of industries and their participants.