What Are the Effects of a Decrease in the Price

question 91

Multiple Choice

What are the effects of a decrease in the price level?

• A) The real interest rate increases, the dollar appreciates, and net exports increase.
• B) The real interest rate increases, the dollar depreciates, and net exports decrease.
• C) The real interest rate decreases, the dollar depreciates, and net exports increase.
• D) The real interest rate decreases, the dollar appreciates, and net exports decrease.

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Definitions:

Unearned Revenue

Money received by an entity for a service or product that has yet to be delivered or completed.

Interest Revenue

Income earned from lending money or from investments in interest-bearing accounts or securities.

Matching Revenue

The accounting principle of recognizing revenue and the related expenses in the same accounting period to accurately report profit.

Incurred Expenses

Costs that have been realized or consumed, typically through the operation of a business.