If Producers Believe That the Increase in Their Relative Prices

question 15

Multiple Choice

If producers believe that the increase in their relative prices is small relative to the increase in the general price level,then the slope of the short-run aggregate supply curve will be

• A)zero.
• B)small.
• C)large.
• D)negative.

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Definitions:

Tax Burden

The distribution of the financial impact of a tax system on individuals or entities, often discussed in terms of who ultimately pays the taxes.

Deadweight Loss

An economic inefficiency that occurs when the equilibrium in a market is not achieved or when a market fails to allocate resources efficiently.

Excise Tax

A tax on the sale of specific goods or services, often included in the price of the product.

Hamburgers

A popular food item consisting of a cooked patty of ground meat, usually beef, placed inside a sliced bread roll or bun.