The economy experiences a decrease in the price level and an increase in real domestic output. Which is a likely explanation? Pick your answer from below and explain your answer choice using aggregate demand and aggregate supply. A. Consumer incomes and the quantity of labor have decreased. B. Business costs and wage rates have decreased. C. The prices of imported resources have increased. D. National income abroad has increased.
The economy experiences a decrease in the price level and an increase in real domestic output. Which is a likely explanation? Pick your answer from below and explain your answer choice using aggregate demand and aggregate supply. A. Consumer incomes and the quantity of labor have decreased. B. Business costs and wage rates have decreased. C. The prices of imported resources have increased. D. National income abroad has increased.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The economy experiences a decrease in the price level and an increase in real domestic output. Which is a likely explanation? Pick your answer from below and explain your answer choice using aggregate demand and aggregate supply.
A. Consumer incomes and the quantity of labor have decreased.
B. Business costs and wage rates have decreased.
C. The prices of imported resources have increased.
D. National income abroad has increased.
**Correct Answer:**
B. Business costs and wage rates have decreased.
Transcribed Image Text:**Question:**
Which combination of factors would most likely increase aggregate demand? Pick your answer from below and explain your answer choice using aggregate demand and aggregate supply.
A. An increase in household indebtedness and a decrease in net exports.
B. An increase in consumer wealth and a decrease in interest rates.
C. An increase in net exports and a decrease in government spending.
D. An increase in business taxes and a decrease in profit expectations.
**Answer:**
B. An increase in consumer wealth and a decrease in interest rates.
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