-The Data in the Above Table Indicate That When the |

question 372

Multiple Choice

$$\begin{array} { | l | l | l | l | } \hline \begin{array} { l } \text { Price } \\\text { level }\end{array} & \begin{array} { l } \text { A ggregate } \\\text { demand } \\\text { (trillions of } \\\text { 2005 dollars) }\end{array} & \begin{array} { l } \text { Short-run } \\\text { aggregate } \\\text { supply } \\\text { (trillions of } \\\text { 2005 dollars) }\end{array} & \begin{array} { l } \text { Long-run } \\\text { aggregate } \\\text { supply } \\\text { (trillions of } \\\text { 2005 dollars) }\end{array} \\\hline 130 & 8 & 12 & 10 \\\hline 120 & 9 & 11 & 10 \\\hline 110 & 10 & 10 & 10 \\\hline 100 & 11 & 9 & 10 \\\hline 90 & 12 & 8 & 10 \\\hline\end{array}$$
-The data in the above table indicate that when the price level is 120,

• A) firms have unexpectedly high inventories, so prices fall.
• B) inventories are at levels planned by firms.
• C) firms will plan to increase the level of output.
• D) firms have unexpectedly low inventories, so prices will rise.

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Definitions:

Congress's Power

The range of legislative authorities granted to the Congress by the Constitution, including making laws, declaring war, and controlling federal spending.

Northern Artisans

Skilled workers from the northern regions who specialized in handmade goods, playing a crucial role in the local economies and communities before industrialization.

Pre-Industrial Age

A period before the widespread use of machines and industrial production processes, characterized by agrarian economies, manual labor, and artisanal crafts.

Subsistence Farming

A self-sufficiency farming system in which farmers focus on growing enough food to feed themselves and their families.