What Impact Will a Temporary Increase in the Supply of a Major

question 20

Multiple Choice

What impact will a temporary increase in the supply of a major input have on real output?

• A)It will increase real output in both the short run and the long run.
• B)It will increase real output in the short run but not in the long run.
• C)It will decrease real output in the short run but not the long run.
• D)It will decrease real output in both the short run and the long run.

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Definitions:

Quantity Supplied

Quantity Supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price, directly influenced by the price level, among other factors.

Inferior Good

A type of good whose demand decreases when the income of consumers increases, opposite to normal goods.

Consumer Income

Consumer income is the total earnings of an individual or household from various sources, including employment, investments, and government assistance, available for spending and saving.

Price Floor

A government or group-imposed limit that prevents prices of goods or services from falling below a certain level.