A Fall in the Price Level

question 102

Multiple Choice

A fall in the price level

• A) increases the real value of money balances, which causes borrowing to decrease, leading to a decrease in investment and total planned real expenditures.
• B) causes exports to rise and imports to fall, leading to an increase in total planned real expenditures.
• C) leads to an increase in total planned real expenditures because of the indirect effect.
• D) causes total planned real expenditures to increase as long as the fall is less than the fall in the price level in other countries.

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A substantial increase in size, number, value, or strength.

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