If the U.S.aggregate Price Level Rises

question 52

Multiple Choice

If the U.S.aggregate price level rises:

• A) net exports will also rise.
• B) interest rates will go down.
• C) the aggregate demand curve will shift to the left.
• D) the purchasing power of wealth will decrease.

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Definitions:

Constant Returns

A situation where increasing the amount of inputs in the production process proportionally increases the output, implying a linear relationship between inputs and outputs.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good changes as production increases.

Profit Maximization

A process or strategy employed by businesses to increase their net profits to the highest possible level.

Output Increases

A situation where the production or yield of goods and services in an economy grows over a certain period.