Which of the Following Is a Reason Why Increases in the Price

question 177

Multiple Choice

Which of the following is a reason why increases in the price level result in a decline in aggregate expenditure?

• A)Price level increases raise real wealth,which causes consumption spending and aggregate expenditure to decline.
• B)Price level increases cause firms and consumers to hold more money,which raises the interest rate.Higher interest rates lower consumption and planned investment expenditures,which lowers aggregate expenditure.
• C)Price level increases in the United States relative to other countries raise net exports,which lowers aggregate expenditure.
• D)As the price level rises,government spending falls,which lowers aggregate expenditure.

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Definitions:

Ottoman Court

This term refers to the central government and imperial household of the Ottoman Empire, which was a major political and cultural hub in the Middle East, Southeast Europe, and North Africa from the late 13th century until the early 20th century.

Mosque of Selim II

An Ottoman imperial mosque in Edirne, Turkey, known for its architectural innovation and grand dome, designed by architect Mimar Sinan.

Madrasa

An Islamic theological college adjoining and often containing a mosque.

Sultan Hasan

Refers to a historic figure, Sultan Hasan, or to the monumental mosque-madrassa complex he founded in Cairo, Egypt in the mid-14th century.