Suppose Consumers Spend More Than Usual

question 94

Multiple Choice

Suppose consumers spend more than usual. In the short run, output will _____; in the long run, output will _____ from its starting point.

• A) increase; remain unchanged
• B) increase; increase
• C) remain unchanged; decrease
• D) remain unchanged; increase

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Definitions:

Brokering Agent

An intermediary or facilitator between a buyer and a seller, helping to negotiate transactions or agreements.

Cash and Carry Wholesaler

A type of wholesaler that operates by selling goods for cash and where the buyer carries away the goods immediately.

Merchant Wholesaler

An intermediary entity that buys goods in bulk from manufacturers to resell them to retailers or other buyers, typically without modifying the goods.

Utilities Offered

Basic services provided to consumers and businesses, such as water, electricity, gas, and telecommunications.