Other Things Constant, a Decrease in Resource Prices Will Lead

question 8

Multiple Choice

Other things constant, a decrease in resource prices will lead to

• A) reduced profits and a reduction in short-run aggregate supply.
• B) increased profits and a reduction in short-run aggregate supply.
• C) reduced profits and an increase in short-run aggregate supply.
• D) increased profits and an increase in short-run aggregate supply.

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Definitions:

Government Deficits

The financial shortfall when a government's expenditures exceed its revenues.

Domestic Output

The sum of the worth of all products and services generated inside the confines of a nation over a specific duration.

Industrially Advanced Countries

Nations characterized by high levels of industrialization, technological advancement, and economic productivity.

Transfer Payments

are non-exchange transactions where one party (usually the government) provides economic benefits to another without receiving a good or service in return.