Which of the Following Explains Why Higher Prices in the Goods

question 180

Multiple Choice

Which of the following explains why higher prices in the goods and services market will lead to an upward sloping short-run aggregate supply curve?

• A) The higher prices will temporarily improve profit margins because many of the cost components of firms will be fixed in the short run.
• B) The higher prices will reduce the purchasing power of the fixed quantity of money and, thereby, stimulate additional output.
• C) The higher prices will expand the economy's resource base and, thereby, stimulate additional output.
• D) The higher prices will improve technology and, thereby, stimulate additional output.

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Definitions:

Aversive Conditioning

A form of behavior modification that involves using unpleasant stimuli to discourage undesirable behaviors.

Systematic Desensitization

A behavioral therapy technique aimed at reducing fear or anxiety responses, through gradual exposure to the feared object or situation.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, emphasizing the role of reinforcement in shaping behavior.

Aversive Conditioning

A form of conditioning that uses unpleasant stimuli to induce a negative response to certain behaviors.