When the Price Level Falls

question 309

Multiple Choice

When the price level falls,

• A)the AS curve shifts rightward but the potential GDP line does not shift.
• B)there is a movement upward along the AS curve.
• C)the AS curve shifts leftward but the potential GDP line does not shift.
• D)there is a movement downward along the AS curve.
• E)both the potential GDP line and the AS curve shift leftward.

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Definitions:

Carpe Diem

A Latin aphorism usually translated as "seize the day," encouraging individuals to make the most of the present moment without concern for the future.

Redistribution Of Income

The transfer of income from certain individuals or groups to others through mechanisms such as taxation, welfare, and government policies.

Equity

The concept of fairness and justice within the processes, distribution, and outcomes in society or specific situations.

Tax System

A tax system is the structured way in which taxes are collected by a government to fund public spending on goods and services.