If the Price Level Does Not Fall or Only Falls

question 105

Multiple Choice

If the price level does not fall or only falls very slowly, then the result will be a prolonged period of

• A)inflation whenever supply increases.
• B)production below potential GDP.
• C)production above potential GDP.
• D)rapid price increases when demand changes.

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Definitions:

Arbitrary

Based on random choice or personal whim, rather than any reason or system.

Stimulus

A signal or item in the environment that elicits a response from an organism.

Perceptual Features

Characteristics of objects in our environment that we can perceive through our senses, such as shape, color, texture, and size.

Varying Conditions

Different or changing states, circumstances, or situations.