A Fall in the Price Level Brings a ________ in the Real

question 22

Multiple Choice

A fall in the price level brings a ________ in the real wage rate that ________ profits and can lead to ________.

• A)rise;reduces;firms going out of business
• B)rise;reduces;new firms entering business
• C)fall;increases;firms going out of business
• D)rise;increases;new firms entering business
• E)fall;decreases;new firms entering business

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the level of production or sales within a certain range, such as rent or salaries.

Absorption Costing

A costing technique that encompasses the total expenses of production, including direct materials, labor, and all overhead costs, both variable and fixed, in a product's cost.

Single Product

A business or manufacturing approach where only one type of product is produced rather than multiple products.

Absorption Costing

An accounting method that includes all direct costs and overhead in the cost of a product.