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Price level

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AP Macroeconomics

Definition

The price level represents the average level of prices for goods and services in an economy at a given point in time.

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Subjects (4)

Practice Questions (9)

What is the relationship between the price level and Real GDP?
What is the relationship between the price level and real GDP output in the short-run aggregate supply (SRAS)?
How does the quantity of real GDP output supplied by firms change as the price level falls in the short-run aggregate supply (SRAS)?
What is the impact of an increase in government spending on the Short-Run Aggregate Supply (SRAS) curve and the price level in the short run?
If the price level increases above equilibrium, what does this tell you about the GDP?
How does a permanent shock affect the price level in the economy?
In the short run, how does contractionary fiscal policy affect aggregate demand and the price level?
What is the result of a decrease in the money supply on the price level in the long run, assuming the velocity of money and real GDP remain constant?
If the velocity of money increases while the money supply remains constant, what is likely to happen to the nominal GDP, assuming that the price level remains constant?

Additional resources (1)

AP Macroeconomics - Unit 4 Overview: Financial Sector

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