In the Short Run, If the Price Level Rises, Then

question 135

Multiple Choice

In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that

• A) workers can be switched from counted to uncounted production.
• B) existing capital equipment can be used more intensively.
• C) wage rates rise almost simultaneously with the price level.
• D) the unemployment rate usually rises dramatically along with the price level.

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