How Does a Reduction in the Price Level Affect the Position

question 90

Multiple Choice

How does a reduction in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?

• A) The C + I + G + X curve shifts down, thereby reducing the equilibrium level of real GDP.
• B) The C + I + G + X curve shifts down, thereby increasing the equilibrium level of real GDP.
• C) The C + I + G + X curve shifts up, thereby reducing the equilibrium level of real GDP.
• D) The C + I + G + X curve shifts up, thereby increasing the equilibrium level of real GDP.

---

Definitions:

Good Faith

An implied promise to act honestly and not take unfair advantage in transactions.

Primarily Liable

Refers to the party or entity that bears the main responsibility in fulfilling an obligation or debt, without dependence on the failure of another party.

Personal Defenses

Legal defenses used in a lawsuit that are specific to the defendant, often relating to the contract's validity or terms.

Fraud in the Inducement

A deceitful act causing someone to enter into an agreement or contract by misrepresenting material facts or intentions.