A Higher Price Level Would Mean ____ for a Person

question 204

Multiple Choice

A higher price level would mean ____ for a person who has a bank deposit of $2 million.

• A)an increase in real income
• B)a decrease in real wealth
• C)a decrease in nominal income
• D)an increase in nominal income

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Definitions:

Fixed Input

A factor of production that cannot be easily increased or decreased in the short term, such as land or machinery.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability of the firm to adjust production levels.

Variable Costs

Outlays that shift in tandem with the quantity of goods produced.

Long Run

A period sufficient for all inputs and production processes to be adjusted, including changing the scale of production facilities.