Question

Which of the following statements is FALSE?A)A rise in the price level lowers real wealth and results in a lower level of consumer spending.B)A rise in the price level increases the demand for money, raises the interest rate, and reduces investment spending.C)A fall in the price level will generally lead to a rise in the level of aggregate output demanded.D)A fall in the price level will reduce the demand for money, raise the interest rate, and increase investment spending.

Answer 1

Answer:

Explanation:

Which of the following is a reason why decreases in the price level result in a rise in aggregate expenditure?

As the price level rises, government spending falls, which lowers aggregate expenditures. ... Price level increases raise real wealth which causes consumption spending and aggregate expenditures to decline. Price level increases cause firms and consumers to hold more money, which raises the interest rate.