If the US Price Level Increased Relative to Price Levels in Foreign

question 84

Multiple Choice

If the U.S. price level increased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

• A) the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged
• B) the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged
• C) the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged
• D) the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged
• E) the domestic aggregate demand and supply curves would remain unchanged

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Definitions:

EPS

Earnings Per Share; a company's profit divided by its number of outstanding shares of common stock.

Financially Distressed

The state of a company or individual facing financial difficulty, often unable to meet debt obligations or manage cash flow effectively.

Bankruptcy

A legal process where individuals or businesses unable to meet their debt obligations can seek relief from some or all of their debts.

Secured Bondholders

Investors holding bonds backed by collateral, giving them a claim on assets in case the issuer defaults.