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

question 248

Multiple Choice

Which of the following is a reason why decreases in the price level result in a rise in aggregate expenditure?

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

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