If Aggregate Demand Shifts Right, Then Eventually Price Level Expectations

question 156

True/False

If aggregate demand shifts right, then eventually price level expectations rise. This increase in price level expectations causes the aggregate demand curve to shift to the left back to its original position.

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Definitions:

Marginal Costs

The increase in aggregate expenses due to the production of an additional unit of a good or service.

Industry Output

The total production or supply of goods and services produced by a specific industry within a certain period.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Game Theory

The study of behavior in situations of interdependence. Used to explain the behavior of an oligopoly.