If Firms Set Prices and Then Keep Them Fixed for a Period

question 245

Multiple Choice

If firms set prices and then keep them fixed for a period of time, their fixed prices imply that

• A) the aggregate price level is fixed and that aggregate demand determines the quantity of goods and services sold.
• B) prices are set by aggregate demand and supply.
• C) the aggregate price level adjusts continuously.
• D) the aggregate price level is fixed and that aggregate supply determines the quantity of goods and services sold.

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Definitions:

Debits

An accounting term representing an entry on the left side of an account ledger, indicating increases in assets or expenses.

Credits

Accounting entries that represent an increase in liabilities or equity, or a decrease in assets, typically reflecting income or gains.

Transactions In QBO

Financial activities recorded within QuickBooks Online, such as sales, purchases, and payments.

Chart Of Accounts

A structured list of a business's financial accounts, designed for easy management and reporting of its financial activities.