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.
B
You might also like to view...
If the natural monopoly shown in the figure above is unregulated, it will sell
A) 2 million units. B) 3 million units. C) 4 million units. D) 5 million units.
How will an increase in population affect the labor market?
A) It will increase the supply of jobs. B) It will shift the market supply curve. C) It will cause a decrease in the quantity of labor demanded. D) It will increase the opportunity cost of leisure.