Ask Question
17 May, 21:35

If the average price level decreases,

what happens to the real output?

A. It remains the same.

B. It decreases.

C. It increases.

D. It has no impact from the price.

+4
Answers (1)
  1. 17 May, 23:06
    0
    The intuition behind the real wealth effect is that when the price level decreases, it takes less money to buy goods and services. The money you have is now worth more and you feel wealthier. So, in response to a decrease in the price level, real GDP will increase.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “If the average price level decreases, what happens to the real output? A. It remains the same. B. It decreases. C. It increases. D. It has ...” in 📘 Advanced Placement (AP) if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers