Which of the Following Will Reduce the Price Level and Raise

question 43

Multiple Choice

Which of the following will reduce the price level and raise real output?

• A) an adjustment of prices to equilibrium
• B) an increase in wage rates
• C) the short-run aggregate supply curve becoming steeper
• D) technical progress

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Definitions:

Raw Material

Basic materials used in the production process, which are transformed into finished goods.

Property, Plant, and Equipment

Long-term assets, including land, buildings, machinery, and vehicles, used in the operation of a business.

Standard Cost Variances

The differences between the expected (standard) costs and the actual costs incurred for materials, labor, and overhead during a period.

Selling and Administrative Expenses

Overhead costs associated with the general operation of a company and the selling of goods or services, not directly tied to production.