An Indirect Effect of an Increase in the Price Level

question 60

Multiple Choice

An indirect effect of an increase in the price level works through

• A) people substituting out of domestic goods and into foreign goods as exchange rates rise.
• B) changes in trade balances as domestic goods become more expensive, causing interest rates to move in the opposite direction from the change in the exchange rate.
• C) interest rates as people save more as the higher prices make their money balances less attractive.
• D) interest rates as people borrow to maintain their money balances, bidding up interest rates and reducing total planned real expenditures.

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Definitions:

Defects Measurement

The process of identifying, quantifying, and analyzing defects in products or services to improve quality and customer satisfaction.

Buyer-supplier Network

A system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to buyer.

Informal System

A network or process within an organization that is not officially sanctioned but emerges from the relationships and social networks among employees.

Current Sources

The existing suppliers or providers from which a company obtains products, services, or information.