A Rise in the Price Level Changes Aggregate Demand Because

question 142

Multiple Choice

A rise in the price level changes aggregate demand because

• A) firms increase their investment when prices are higher.
• B) the real value of people's wealth varies directly with the price level and so does their spending.
• C) the real value of people's wealth decreases and so they decrease their consumption.
• D) the more money people have, the more it is worth and hence the more goods and services they demand.

---

Definitions:

Research Methods

Techniques or procedures used to gather and analyze information to increase understanding of a topic or issue.

Experimental Designs

Refers to the plan and structure of an investigation aimed at testing hypotheses through controlled and manipulated variables.

Dependent Variable

A variable in an experiment or study whose changes are determined by the manipulation of one or more independent variables.

Control Condition

In an experiment, a group that does not receive the treatment or intervention, serving as a baseline to compare the effects of the treatment.