If the Price Level Decreases

question 13

Multiple Choice

If the price level decreases,

• A)the aggregate expenditures line shifts downward; the economy moves down along the aggregate demand curve
• B)the aggregate expenditures line shifts upward; the economy moves up along the aggregate demand curve
• C)the aggregate demand curve shifts to the right; the economy moves along the aggregate expenditures line
• D)the aggregate demand curve shifts to the left; the economy moves along the aggregate expenditures line
• E)the aggregate expenditures line shifts upward; the economy moves down along the aggregate demand curve

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Definitions:

Severe Inflation

An extreme rate of inflation, causing a rapid and uncontrollable increase in prices, significantly eroding purchasing power.

Food Shortages

Situations in which the supply of essential food commodities is insufficient to meet the demand, often resulting in hunger and malnutrition.

War Revenue

Refers to funds raised to finance a situation of armed conflict, typically through taxation or the issuance of war bonds.

Union General

A high-ranking officer in the Union army during the American Civil War.