Question

question 11 which of the following is a true statement? ○ the aggregate price level is measured as the rate of change in the inflation rate. ○ the inflation rate is measured as the rate of change in the federal government budget deficit. ○ money or the money supply is defined as federal reserve notes. ○ the average price of goods and services in an economy is called the aggregate price level.

Explanation:

• Analyze the first option: The aggregate price level is the average price of goods/services, while the inflation rate is the rate of change of the aggregate price level. So this statement is false.
• Analyze the second option: The inflation rate is related to the change in the aggregate price level, not the federal government budget deficit. This is false.
• Analyze the third option: The money supply includes more than just Federal Reserve notes (e.g., demand deposits, other forms of money). This is false.
• Analyze the fourth option: By definition, the aggregate price level is the average price of goods and services in an economy. This is true.

Answer:

The average price of goods and services in an economy is called the aggregate price level.