In the Short-Run, an Increase in the Average Price Level

question 69

Multiple Choice

In the short-run, an increase in the average price level in the economy will cause:

• A) demand for a good to increase but total production to decline.
• B) profits to rise and thus, total production to increase.
• C) interest rates to fall and thus, total production to decline.
• D) input costs to fall and thus, total production to rise.
• E) input costs to fall and thus, total production to decline.

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Definitions:

Intuitive Thinkers

Individuals who rely on intuition and instinct rather than analytical processes to make decisions.

Problem Situation

A problematic circumstance that presents difficulty, requiring analysis and action to resolve.

Step-By-Step Fashion

A methodical approach to completing tasks or solving problems by proceeding through a series of stages or procedures one after the other.

Systematic Thinkers

Individuals who approach problems or situations in a methodical and organized manner, often using a step-by-step process to analyze and solve issues.