Suppose the Full-Employment Level of Real Output (Q) for a Hypothetical

question 86

Multiple Choice

Suppose the full-employment level of real output (Q) for a hypothetical economy is $500 and that the price level (P) initially is 100.Use the following short-run aggregate supply schedules to answer the next question. Refer to the information above.If the price level unexpectedly declines from 100 to 75, the level of real output in the short run will:

• A)rise from $500 to $560.
• B)fall from $500 to $440.
• C)fall from $560 to $500.
• D)rise from $440 to $500.

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Definitions:

Proposition

A declarative sentence that can be evaluated as true or false, serving as the basic unit of discourse in logic.

Explanation

The act or process of making something clear or understandable, often by providing details or reasons.

Argument

A set of statements intended to establish a position or point of view, typically consisting of premises and a conclusion.

Explanandum

The proposition whose truth one is attempting to explain.