What Are the Effects of an Increase in the Price

question 2

Multiple Choice

What are the effects of an increase in the price level?

• A) The interest rate increases, the dollar depreciates, and net exports increase.
• B) The interest rate increases, the dollar appreciates, and net exports decrease.
• C) The interest rate decreases, the dollar depreciates, and net exports increase.
• D) The interest rate decreases, the dollar appreciates, and net exports decrease.

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Definitions:

Peaks And Troughs

Describes the high and low points in economic, financial, or business cycles, indicating periods of maximum and minimum activity or value.

Real GDP

Gross Domestic Product adjusted for inflation, which reflects the value of all goods and services produced by an economy in a year, measured in constant prices.

Unemployed

Individuals who are capable of working and seeking work but are without jobs during the period of assessment.

Unemployment Insurance Benefits

Payments made by the government or a government-insured program to unemployed individuals who meet specific eligibility requirements.