An Increase in the Price Level Leads to

question 130

Multiple Choice

An increase in the price level leads to

• A)a rightward shift of the aggregate demand curve.
• B)a movement upward along the aggregate demand curve.
• C)a movement downward along the aggregate demand curve.
• D)neither a shift in the aggregate demand curve nor a movement along it.
• E)a leftward shift of the aggregate demand curve.

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Definitions:

Output Level

The quantity of goods or services produced by a firm or an economy within a given period.

Total Variable Costs

The sum of expenses that vary directly with the level of production, such as materials and labor costs.

Total Costs

The aggregate amount of money spent on producing goods or delivering services, which includes both constant and fluctuating costs.

Marginal Cost

The cost incurred by producing one more unit of a product, which is pivotal for decision-making regarding production levels.