A Decrease in the Price of a Good Will, All

question 223

Multiple Choice

A decrease in the price of a good will, all other things unchanged, result in:

• A) an increase in demand.
• B) an increase in supply.
• C) an increase in the quantity demanded.
• D) more being supplied.

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Definitions:

Autonomous Investment

Investment that does not change in response to alterations in the overall economy or income levels, such as public infrastructure investments.

Equilibrium Real GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand, adjusted for inflation.

Planned Aggregate Expenditure

The total amount households, businesses, and the government plan to spend on goods and services at different levels of national income.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption (the output).