The Aggregate Expenditures Model and the Aggregate Demand Curve Can

question 262

Multiple Choice

The aggregate expenditures model and the aggregate demand curve can be reconciled because, other things equal, in the aggregate expenditures model,

• A) changes in the price level have no effect on the equilibrium level of GDP.
• B) an increase in the price level increases the real value of wealth.
• C) the level of aggregate expenditures and therefore the level of real GDP vary inversely with the price level.
• D) the level of aggregate expenditures and therefore the level of real GDP vary directly with the price level.

---

Definitions:

Implicit Memory

Refers to memories that are recalled without conscious effort, such as procedural memories for tasks.

Ku Klux Klan

A white supremacist hate group in the United States, known for racist terrorism, including lynching and intimidation against African Americans and other minority groups.

Unregulated Capitalism

An economic system without governmental oversight and control, where the free market dictates prices, production, and distribution of goods and services.

Cosmopolitan Character

The quality of being familiar with and at ease in many different countries and cultures, often associated with an openness to new ideas and diversity.