In the Long Run, If the Price Level Increases, Then

question 86

Multiple Choice

In the long run, if the price level increases, then nominal wages and other input prices will

• A) also rise, so firms will reduce their output level.
• B) also rise, so firms will not change their output level.
• C) not change, so firms will not change their output level.
• D) decrease, so firms will increase their output level.

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Definitions:

Obligations

Legal or moral duties that an individual or entity is bound to perform or uphold.

Substantially Perform

Fulfilling enough of a contractual obligation or duty that any remaining uncompleted parts are considered minor or insignificant.

Accord and Satisfaction

A legal settlement where two parties agree to resolve a dispute by the debtor providing payment or performance that is different from what was originally owed.

Operation of Law

Changes in legal rights or obligations that occur automatically due to legal rules, rather than the action of any party.