If Business Decision Makers Expect That the Inflation Rate Will

question 144

Multiple Choice

If business decision makers expect that the inflation rate will increase in the near future,

• A) long-run aggregate supply will increase.
• B) long-run aggregate supply will decrease.
• C) short-run aggregate supply will increase.
• D) short-run aggregate supply will decrease.

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Definitions:

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, used as an indicator of inflation.

Economic Scale

Economies of scale, which refer to the cost advantages that enterprises obtain due to size, output, or scale of operation.

Critical Factors

Essential elements or conditions necessary for the success of a business or project.

New Business

A venture that has been recently established, entering the market with fresh offerings of products or services.