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

question 229

Multiple Choice

In the long run, if the price level decreases, then the economy's output level will

• A) increase initially, but then fall back again.
• B) increase.
• C) decrease.
• D) stay the same.

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Definitions:

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.

Market Price

The prevailing cost at which you can buy or sell a service or asset in the market.

Shares Outstanding

Shares Outstanding refer to all shares currently owned by shareholders, company insiders, and investors in the public domain, representing the total equity ownership of a company.

Reverse Stock Split

A process by which a company reduces the total number of its outstanding shares to increase the per share price without changing the company's overall market capitalization.