If the Price Level Falls,the Real Value of a Dollar

question 4

Multiple Choice

If the price level falls,the real value of a dollar

• A)rises,so people will want to buy more.This response helps explain the slope of the aggregate demand curve.
• B)rises,so people will want to buy more.This response shifts aggregate demand to the right.
• C)falls,so people will want to buy less.This response helps explain the slope of the aggregate demand curve.
• D)falls,so people will want to buy less.This response shifts aggregate demand to the left.

---

Definitions:

D/A

Debt-to-Assets ratio, a financial metric indicating the proportion of a company's assets that are financed by debt.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all incomes and expenses except interest and income tax expenses.

Common Share Price

The market price of a single share of a company's common stock, reflecting the company's valuation, investor sentiment, and market conditions.

WACC

Weighted Average Cost of Capital, a calculation of a firm's capital cost where each category of capital is proportionately weighted.