We Could Explain Continued Increases in Both Output and the Price

question 81

True/False

We could explain continued increases in both output and the price level by supposing that only aggregate demand shifted right over time.

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Definitions:

Industry Entry

The process by which a new competitor or business enters into an industry, facing various barriers such as high startup costs, regulatory requirements, and competition.

Short Run

A period of time during which at least one of a firm's inputs is fixed and cannot be changed.

Normal Return

The minimum profit necessary to keep a company in business, equating to the opportunity cost of capital.

Own Capital

The funds or assets personally invested by the owners into a business, distinct from borrowed capital.