When the AE Curve Shifts Upward Because the Price Level

question 13

Multiple Choice

When the AE curve shifts upward because the price level falls, the corresponding effect on the aggregate demand curve is

• A) a shift rightward of the aggregate demand curve.
• B) a shift leftward of the aggregate demand curve.
• C) nothing because aggregate demand does respond to changes in the price level.
• D) a movement downward along the aggregate demand curve.
• E) a movement upward along the aggregate demand curve.

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Definitions:

Secured Transaction

Any transaction in which the payment of a debt is guaranteed, or secured, by personal property owned by the debtor or in which the debtor has a legal interest.

Collateral

Assets or property pledged as security for the repayment of a loan, subject to seizure on default.

Foreclosure

A proceeding in which a mortgagee either takes title to or forces the sale of the mortgagor’s property in satisfaction of a debt.

Repossess

The act of taking back possession of property by a seller or lender from the buyer or borrower, typically due to failure in payment.