Along a Short-Run Aggregate Supply Curve, a Decrease in the Price

question 214

Multiple Choice

Along a short-run aggregate supply curve, a decrease in the price level means that

• A) more output is produced as consumer demand increases.
• B) less output is produced as firms decrease production.
• C) more output is produced as firms increase production because wages fall more than the price level falls, making it profitable to hire more workers.
• D) output does not change because firms do not change the quantity they produce.

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