The Degree of Responsiveness of Aggregate Output to a Price

question 81

Multiple Choice

The degree of responsiveness of aggregate output to a price change declines as the:

• A)rate of savings increases.
• B)economy approaches its potential output.
• C)GDP gap widens over time.
• D)the price elasticity of imports declines.
• E)the excess capacity of all the firms in the economy increases over time.

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Definitions:

Small Companies

Organizations with a limited number of employees and revenue, often characterized by a narrow market focus.

Microloans

Small-business loans often used to buy equipment or operate a business.

Small Business Administration

A U.S. government agency that provides support to entrepreneurs and small businesses.