Along a Short- Run Aggregate Supply Curve, a Decrease in the Price

question 255

Multiple Choice

Along a short- run aggregate supply curve, a decrease in the price level means that

• A) output does not change because firms do not change the quantity they produce.
• B) more output is produced as firms increase production because wages fall more than the price level falls, making it profitable to hire more workers.
• C) less output is produced as firms decrease production.
• D) more output is produced as consumer demand increases.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members, usually derived from the company’s profits.

Purchase

The act of obtaining goods or services in exchange for money, which can be recorded as an asset or expense depending on its use.

Account

A record in financial accounting that tracks the increase and decrease of financial values, such as assets, liabilities, revenues, and expenses.

Revenues

The total income generated from normal business operations and before any expenses are subtracted.