An Increase in the Aggregate Price Level Will Cause

question 73

Multiple Choice

An increase in the aggregate price level will cause

• A)a reduction in the interest rate and a rightward shift in the IS curve.
• B)a upward shift in the LM curve and an increase in the interest rate.
• C)an increase in investment and an increase in output.
• D)an ambiguous effect on investment.

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Definitions:

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health.

Liabilities

Financial obligations or debts owed by a company or individual.

Commercial Banks

Financial institutions that provide various financial services, including accepting deposits, offering business and personal loans, and other investment products.

Security Selection

The process of choosing individual securities for investment with the aim of achieving a portfolio's investment goals.