What Is the Effect of an Increase in the Price

question 12

Multiple Choice

What is the effect of an increase in the price level?

• A)The real value of dollar-denominated assets will rise.
• B)The aggregate expenditure line will shift downward.
• C)The equilibrium level of output demanded will rise.
• D)There will be downward movement along a particular aggregate demand curve.
• E)The aggregate demand curve will shift rightward.

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Definitions:

Price Level

The total mean price of the complete array of goods and services in the economy.

Real Output

Real output refers to the total amount of goods and services produced, adjusted for price changes and inflation, giving a more accurate reflection of an economy's size and growth.

Official Unemployment Rate

The percentage of the labor force that is jobless and actively looking for employment, measured by government statistics.

Part-Time Workers

Individuals who are employed in positions that have fewer hours than a full-time job, typically offering less pay and fewer benefits.