Suppose the Price Level Increases

question 132

Multiple Choice

Suppose the price level increases.How will the aggregate demand curve be affected?  

• A) The aggregate demand curve will shift to the right. 
• B) The aggregate demand curve will shift to the left. 
• C) The level of aggregate quantity demanded will increase. 
• D) The level of aggregate quantity demanded will decrease.

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Definitions:

Economic Profit

The difference between total revenues earned from production and the total opportunity costs of all inputs used in production.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment to changes in market conditions.

Losses

Losses refer to the amount by which expenses exceed revenues in a particular period, indicating a negative financial performance for a business.

Constant-cost Industry

An industry in which the costs of production, including the prices of raw materials and wages, do not change as the industry's output changes.