Asked by Katelyn Holmquist on Apr 24, 2024
Identify the correct statement.
A) If the price level increases,we feel poorer and buy less.
B) If the price level increases,we feel richer and buy more.
C) If domestic prices increase,we substitute domestic goods for imported ones.
D) An increase in the price of a particular good leads to a substitution.
E) A decrease in the price of a particular good is like an increase in income and therefore we buy more.
Price Level
The average of current prices across the entire spectrum of goods and services produced in the economy, reflecting inflation or deflation.
- Identify the relationship between price levels, income, and consumer purchasing behavior.
Learning Objectives
- Identify the relationship between price levels, income, and consumer purchasing behavior.