A Fall in the Price Level

question 102

Multiple Choice

A fall in the price level

• A) increases the real value of money balances, which causes borrowing to decrease, leading to a decrease in investment and total planned real expenditures.
• B) causes exports to rise and imports to fall, leading to an increase in total planned real expenditures.
• C) leads to an increase in total planned real expenditures because of the indirect effect.
• D) causes total planned real expenditures to increase as long as the fall is less than the fall in the price level in other countries.

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Definitions:

Permanent Changes

Alterations in a state, condition, or property that do not revert to their original form or state over time.

Training

The process of being taught the skills or knowledge needed for a particular job or activity.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, emphasizing the role of reinforcement in shaping behavior.

Reinforcer

In behavior psychology, any stimulus which strengthens or increases the probability of a specific response or behavior.