Question : 11) A rise in the price level brings a ________ : 1240518

11) A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________.

A) rise; decreases; decrease

B) fall; decreases; decrease

C) fall; increases; increase

D) rise; increases; increase

E) fall; decreases; increase

12) When the price level increases there is ________ movement along the aggregate demand curve because the buying power of money ________.

A) an upward; decreases

B) a downward; decreases

C) an upward; increases

D) a downward; increases

E) no; does not change

13) Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in

A) the buying power of money.

B) the real interest rate.

C) the money wage rate.

D) the price of domestic goods and services relative to foreign goods and services.

E) potential GDP.

14) At a price level of 100, John has savings equal to $20,000. If the price level increases to 130, the buying power of John’s savings is approximately

A) $12,780.

B) $15,400.

C) $20,000.

D) $26,000.

E) $30,000.

15) A year over year ________ in the buying power of money means that definitely ________ from one year to the next.

A) decrease; the price level increased

B) increase; the price level increased

C) decrease; inflation increased

D) increase; inflation increased

E) Both answers A and C are correct.

16) If the price level doubles, it will

A) increase the quantity of money.

B) have no effect on the buying power of money.

C) decrease the buying power of money.

D) increase potential GDP.

E) decrease potential GDP.

17) When the price level rises and increases the demand for money, the nominal interest rate ________ and the real interest rate ________.

A) rises; rises

B) rises; falls

C) falls; rises

D) falls; falls

E) does not change; does not change

18) In the short run, a rise in the price level brings a ________ in the real interest rate that ________ investment, bringing ________ in the quantity of real GDP demanded.

A) rise; decreases; a decrease

B) fall; decreases ; a decrease

C) fall; increases ; an increase

D) rise; increases ; an increase

E) rise; decreases; an increase

19) A reason why an increase in the price level decreases the quantity of real GDP demanded is that

A) the buying power of money increases.

B) the real interest rate falls.

C) the price of domestic goods and services increases relative to foreign goods and services.

D) the inflation rate decreases.

E) potential GDP decreases.

20) A rise in the U.S. price level brings a ________ in the price of U.S. exports relative to imports that ________ exports of U.S. goods, bringing ________ in the quantity of U.S. real GDP demanded.

A) rise; decreases; a decrease

B) fall; decreases; a decrease

C) fall; increases; an increase

D) rise; increases; an increase

E) rise; increases; a decrease