When the Price Level Falls the Quantity of

question 78

Multiple Choice

When the price level falls the quantity of

• A)consumption goods demanded rises,while the quantity of net exports demanded falls.
• B)consumption goods demanded and the quantity of net exports demanded both rise.
• C)consumption goods demanded and the quantity of net exports demanded both fall.
• D)consumption goods demanded falls,while the quantity of net exports demand rises.

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Definitions:

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period of time.

NPV

Net Present Value; a financial calculation used to determine the value of a series of future cash flows by discounting them to the present using a specific rate.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Risk-Free Rate

The rate of return of an investment with zero risk, serving as a benchmark for evaluating other investments.