When the price level falls, the aggregate planned expenditure ...

[nmorano1]

When the price level falls, the aggregate planned expenditure curve shifts ________, equilibrium expenditure ________ and there is a movement ________ along the aggregate demand curve.
 
  A) upward; decreases; downward
  B) upward; increases; downward
  C) upward; increases; upward
  D) downward; decreases; downward
  E) downward; increases; upward

Question 2

Explain when a country would face a balance of payments deficit and when it would face a balance of payments surplus if it was operating under a fixed exchange rate system.
 
  What will be an ideal response?

[heyhey123]

Answer to Question 1

B

Answer to Question 2

Under a fixed exchange rate system, a country would face a balance of payments deficit when the supply of that country's currency exceeds the demand for the currency at the current exchange rate. The country would face a balance of payments surplus when the demand for its currency exceeds the supply of its currency at the current exchange rate.