Consider the Basic AD/AS Model

question 71

Multiple Choice

Consider the basic AD/AS model.If their unit costs rise as output increases,price-taking firms will be prepared to produce ________ only if ________.

• A)more; prices decrease
• B)more; the economy is in equilibrium
• C)their current output; prices increase
• D)less; prices increase
• E)more; prices increase

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Definitions:

Personal Income

The total amount of income received by an individual or household from all sources, including but not limited to wages, salaries, dividends, and rental income, before any taxes or deductions.

Corporate Income

is the total profit that a company generates from its operations, after expenses and taxes are subtracted from total revenue.

Transfer Payments

Payments made by the government to individuals without any expectation of a good or service being provided in return, such as pensions or welfare benefits.

Domestic Output

The overall valuation of all goods and services made within a country's territorial limits within a designated timeframe.