What Is the Effect of an Increase in the Price

question 104

Multiple Choice

What is the effect of an increase in the price level?

• A)The real value of dollar-denominated assets will rise.
• B)The aggregate expenditure line will shift upward.
• C)The equilibrium level of output demanded will fall.
• D)There will be downward movement along a particular aggregate demand curve.
• E)The aggregate demand curve will shift rightward.

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Definitions:

Net Markdowns

The total decrease in the original selling prices of products, accounting for promotions or clearance sales, minus any markdown cancellations.

Periodic Inventory System

An inventory accounting system where the inventory balance is updated and the cost of goods sold is calculated only at the end of each accounting period.

Merchandise Purchases

The acquisition of goods for resale at a profit, a central activity of retail and wholesale businesses.

Lower of Average Cost or Market

An inventory valuation method where inventory is valued at either its average cost or market value, whichever is lower.