What Would Cause the Price Level to Rise and Output

question 90

Multiple Choice

What would cause the price level to rise and output to fall in the short run?

• A) an increase in the money supply
• B) a decrease in the money supply
• C) an adverse supply shock
• D) a favourable supply shock

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Definitions:

Technology Stocks

Shares in companies that operate in the technology sector, including hardware, software, and IT services.

Overvalued

A term describing a security or asset priced higher than its true intrinsic value, often based on speculative demand rather than fundamentals.

Technology Bubble

A market condition characterized by the rapid inflation of technology stocks to unsustainable levels, often followed by a sharp decline.

All-Equity Firm

A company that is financed entirely by its shareholders without any debt.