The Main Reason That Many Businesses Fail When the Price

question 74

Multiple Choice

The main reason that many businesses fail when the price level is falling is that ________.

• A)deflation causes a decline in short-run aggregate supply
• B)as prices fall,businesses are unable to predict the quantity of output they will be able to sell
• C)the real value of the firms assets declines in proportion to the decrease in the price level
• D)falling prices mean that regular loan payments become increasingly difficult

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Definitions:

Assignment

A task or piece of work allocated to someone as part of a job or course of study.

Intrinsic Motivation

The drive to engage in an activity for its own sake and personal rewards.

Performs Behavior

The act of carrying out actions or responses by an organism or individual in response to external or internal stimuli.

Pancreas

An organ in the digestive and endocrine system that secretes digestive enzymes and hormones, including insulin and glucagon.