If the Price Level Increases,the AE Curve Shifts

question 9

Multiple Choice

If the price level increases,the AE curve shifts

• A)upward and there is a movement along the AD curve.
• B)upward and the AD curve shifts leftward.
• C)downward and there is a movement along the AD curve.
• D)upward and the AD curve shifts rightward.
• E)downward and the AD curve shifts rightward.

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Definitions:

Purchases Returns and Allowances

From the buyer’s perspective, returned merchandise or an adjustment for defective merchandise.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis rather than continuously.

Condensed Income Statements

Simplified financial statements that present a summary of a company's revenue, expenses, and profitability over a particular period.

Merchandising Companies

Companies that purchase goods in a finished condition and resell them at a profit without further processing.