The Positive Relationship Between Short-Run Aggregate Supply and the Price

question 293

Multiple Choice

The positive relationship between short-run aggregate supply and the price level indicates that, in the short run

• A) firms produce more output as the price level falls.
• B) firms produce more output as the price level rises.
• C) the money wage rate increases when moving along the short-run aggregate supply curve.
• D) lower price levels are more profitable for firms.

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Definitions:

Unearned Revenue Account

Refers to money received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Debit Balance

An accounting term indicating that a particular account has more debits than credits, often referring to an account's overall debt or expenditure.

Credit Balance

In accounting, it refers to the balance on the right side of a ledger account, indicating the amount that a company owes or liabilities.

Revenue Account

An account that tracks the income generated from normal business operations, including the sale of goods and services.