If Prices of Goods and Services Quickly Adjusted to Demand

question 220

Multiple Choice

If prices of goods and services quickly adjusted to demand shocks, then

• A) firms would find it difficult to produce at their optimal output rates.
• B) output rates would quickly adjust to changes in demand.
• C) firms would find it easier to produce at their optimal output rates.
• D) the economy would experience severe short-run fluctuation.

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Definitions:

Digoxin

A medication used to treat various heart conditions, including atrial fibrillation and heart failure.

Milliliters

A metric unit of volume equal to one thousandth of a liter.

Hydromorphone HCl

An opioid medication used to relieve moderate to severe pain.