Jenna Neuton
New member
a) when price level falls consumers increase their saving rate
b) decreases in price level cause increases in private sector wealth which lead to increases in desired consumption
c) when price level falls firms must compete more when output increases
d) increased production results in lower production costs
e) aggregate expenditure increases as the price level rises
AND
Price levels - which correctly represents a 5% inflation rate?
1. 100, 105, 105, 105
2. 95, 100, 105, 110
3. 100, 105, 110.25, 115.76
4. 100, 105, 110, 115
5. 100, 100, 100, 100
b) decreases in price level cause increases in private sector wealth which lead to increases in desired consumption
c) when price level falls firms must compete more when output increases
d) increased production results in lower production costs
e) aggregate expenditure increases as the price level rises
AND
Price levels - which correctly represents a 5% inflation rate?
1. 100, 105, 105, 105
2. 95, 100, 105, 110
3. 100, 105, 110.25, 115.76
4. 100, 105, 110, 115
5. 100, 100, 100, 100