When the Price Level Is Below the Level at Which

question 185

Multiple Choice

When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve

• A) there will be no price level change.
• B) there will be pressures that will lead to a shift of either the aggregate demand or the long run aggregate supply curves.
• C) total planned real expenditures will exceed actual real GDP, and the price level will increase.
• D) total planned real expenditure will be lower than actual real GDP, and the price level will increase.

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Definitions:

Values Increase

refers to a scenario where numerical values or quantities grow or become larger.

Scatter Diagram

A graphical representation of two variable data points that helps to determine the relationship between them.

Linear Relationship

A type of relation between two variables where the change in one variable is directly proportional to the change in another variable.

Cross-Classification Table

A table that displays the frequency distribution of variables to show how they are distributed across each other.