The Economy Experiences an Increase in the Price Level and a Decrease

question 119

Multiple Choice

The economy experiences an increase in the price level and a decrease in real domestic output.Which is a likely explanation?

• A)productivity has increased
• B)input prices have increased
• C)excess capacity has decreased
• D)government regulations have been reduced

---

Definitions:

Middle Three Quintiles

The segments of the population that fall into the second, third, and fourth quintiles when dividing the total population into five equal groups based on income or wealth.

Income Received

It refers to the total amount of money obtained by individuals or entities typically through employment, investments, or other sources.

Upper Quintiles

Refers to the top 20% of a population in terms of income or wealth distribution.

Line L

Represents the relationship between the quantity of labor hired and the amount of output produced, often used in economics to illustrate productivity.