A Rise in the Price Level Will Have a Direct

question 44

Multiple Choice

A rise in the price level will have a direct effect on spending because

• A)people like to spend more when prices are higher.
• B)the real value of the money people have varies directly with the price level,and so does their spending.
• C)the real value of the money people have decreases and they can buy less with it.
• D)the more money they have the more it is worth and the more goods and services they can buy.

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Definitions:

Cell A

In the context of matrices or spreadsheets, it typically refers to the top-left cell or the first cell in a table.

Compounded Annually

A method of calculating interest where the interest earned over a period is added to the principal, and the total becomes the basis for calculating interest in the next period, occurring once per year.

Positively Correlated

A relationship between two variables where both either increase or decrease together.

Negatively Correlated

A statistical relationship between two variables in which one variable increases as the other decreases.