Which of the Following Will Reduce the Price Level and Raise

question 18

Multiple Choice

Which of the following will reduce the price level and raise real output?

• A)An adjustment of prices to equilibrium.
• B)An increase in wage rates.
• C)The short run aggregate supply curve becoming steeper.
• D)Technical progress.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, age, or obsolescence.

Double Diminishing-Balance

A method of accelerated depreciation which calculates depreciation at twice the rate of the straight-line depreciation method on the remaining book value each year.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used.

Diminishing-Balance

A method of depreciation that accelerates the rate at which an asset loses value, applying a constant rate to the declining book value each period.