An Increase in the Price Level

question 66

Multiple Choice

An increase in the price level

• A)increases the real value of money balances which causes borrowing to decrease,leading to a decrease in investment and the quantity demanded of aggregate output.
• B)causes exports to fall and imports to rise,leading to an decrease in quantity demanded of aggregate output.
• C)leads to an increase in the quantity of aggregate output because of the open economy effect.
• D)causes the quantity demanded of aggregate output to increase as long as the fall is less than the fall in the price level in other countries.

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Definitions:

Railroads

Transportation networks consisting of tracks, trains, and stations used for the movement of goods and passengers, significantly contributing to economic development and expansion.

Second Industrial Revolution

A phase of rapid industrialization in the final third of the 19th century and the beginning of the 20th century, marked by significant advances in technology and production methods, including the spread of the steel industry and mass production.

National Market

An economic concept referring to the nationwide integration of economic activities and markets, facilitated by transportation, communication, and regulatory systems.

Western Territories

Areas in the western part of the United States that were explored, settled, and ultimately organized into states during the 19th and early 20th centuries.