If the Price Level in an Economy Turns Out to Be

question 193

Multiple Choice

If the price level in an economy turns out to be higher than that expected by workers and firms, _____.

• A) firms increase production.
• B) the economy's potential output level increases.
• C) the economy's short-run aggregate supply curve shifts rightward.
• D) the economy's short-run aggregate supply curve shifts leftward.
• E) a recessionary gap develops.

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Definitions:

Total

This refers to the sum or aggregate amount of any given set of numbers or measures.

Columns Balance

The process of verifying that the sum of debit values equals the sum of credit values in an accounting system, ensuring accuracy in records.

Adjusted Trial Balance

A compilation of all account records and their corresponding balances, updated following adjustment entries, utilized for creating financial reports.

General Ledger

A comprehensive record of all of a company's financial transactions, used to compile financial statements.