The Quantity of Real GDP Supplied Increases When the Price

question 156

Multiple Choice

The quantity of real GDP supplied increases when the price level increases because

• A)investment increases.
• B)the quantity of money increases.
• C)the real wage rate falls.
• D)the real wage rate rises.
• E)aggregate demand increases.

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Definitions:

Cost of Production

Refers to the total expenses incurred in the manufacture of goods or services, including raw materials, labor, and overhead costs.

Buyers' Utility

The satisfaction or benefit that consumers receive from purchasing and consuming goods and services.

Firm's Revenues

The total amount of money received by a company from its business activities, before any expenses are subtracted.

MU-to-P Ratio

The ratio of marginal utility (MU) to price (P), used in consumer choice theory to determine the optimal consumption bundle.