An Increase in the Price Level Decreases Planned Expenditure Because

question 252

Multiple Choice

An increase in the price level decreases planned expenditure because

• A) real wealth decreases, thus decreasing expenditure.
• B) current prices rise relative to future prices, increasing expenditure.
• C) domestic prices rise relative to foreign prices, increasing net exports.
• D) the real interest rate rises, increasing consumption expenditure.

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Definitions:

Gross Profit Percentage

A financial metric that shows the portion of revenue that exceeds the cost of goods sold, expressed as a percentage.

Net Profit Margin Ratio

An indicator of profitability, calculated as net income divided by revenue.

Total Asset Turnover

A financial gauge assessing how well a company employs its assets to create sales turnover.

Cash Dividend

A payout in cash form from a corporation's profits to the individuals holding its shares.