Explain How a Decrease in the Price Level Affects the Aggregate

question 150

Multiple Choice

Explain how a decrease in the price level affects the aggregate quantity demanded.

• A)It causes an increase in the interest rate and a decrease in investment spending.
• B)It causes an increase in the interest rate and an increase in investment spending.
• C)It causes a decrease in the interest rate and a decrease in investment spending.
• D)It causes a decrease in the interest rate and an increase in investment spending.
• E)It causes a decrease in the interest rate and an increase in savings.

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Definitions:

Res Ipsa Loquitur

Literally, the thing speaks for itself. A doctrine that, in some circumstances, gives rise to an inference that a defendant was negligent and that his negligence was the cause of the plaintiff’s injury.

Doctrine

A belief or set of beliefs held and taught by a church, political party, or other group.

Negligent Hiring

The failure of an employer to perform due diligence during the hiring process, resulting in the recruitment of an individual who causes harm or poses a risk to others.

Respondeat Superior

A legal doctrine holding an employer or principal legally responsible for the wrongful acts of an employee or agent, if such acts occur within the scope of employment or representation.