A Fall in the Price of a Good Causes Producers

question 246

Multiple Choice

A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. This fact illustrates

• A) the nature of an inferior good.
• B) the law of supply.
• C) a change in supply.
• D) the law of demand.

---

Definitions:

GDP Deflator

A metric that tracks the price points of all newly produced domestic final goods and services, aimed at transforming nominal GDP into real GDP.

Per Capita Real GDP

A measure of the average economic output per person, adjusted for inflation, in a specific area.

Population

Population refers to the total number of people living in a particular area or country at a specific time.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, essentially adjusting for inflation and allowing for comparisons across time periods by reflecting the prices of all goods and services produced domestically.