What Happens When the Price Level Rises

question 11

Multiple Choice

What happens when the price level rises?

• A) Interest rates rise, so firms increase investment.
• B) Interest rates rise, so firms decrease investment.
• C) Interest rates fall, so firms increase investment.
• D) Interest rates fall, so firms decrease investment.

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Definitions:

Expense

The cost or expenditure incurred in the transaction of an activity or the procurement of goods and services.

On-Campus Dorm

Residential facilities located on a college or university campus where students can live while attending the institution.

Manage Money

The process of organizing, planning, and controlling financial resources effectively to meet personal or business goals.

Budget

An estimate of income and expenditure for a set period of time.