A Decrease in the Price Level in the United States

question 157

Multiple Choice

A decrease in the price level in the United States will have what effect on the aggregate expenditure line?

• A)Aggregate expenditure will shift downward.
• B)Aggregate expenditure will become steeper.
• C)Aggregate expenditure will shift upward.
• D)Aggregate expenditure will not be affected by an increase in the price level in the United States.

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Definitions:

Marginal Product

The additional output generated by employing one more unit of a particular input, keeping other inputs constant.

Units of Labor

Measurements used to quantify the work input by labor forces, often referring to hours worked or number of workers.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Marginal Product Curve

A graphical representation that shows how the addition of one more unit of a resource to production affects the output of a product.