An Increase in the Price Level Will Cause

question 132

Multiple Choice

An increase in the price level will cause

• A)an increase in the quantity of aggregate output supplied
• B)a decrease in the quantity of aggregate output supplied
• C)a leftward shift of the aggregate supply curve
• D)a rightward shift of the aggregate supply curve
• E)a leftward or rightward shift of the aggregate supply curve,depending on the reason for the price change

---

Definitions:

Lower Costs

Refers to a reduction in the expenses incurred in the production of goods or provision of services, potentially leading to higher profitability.

Large Firms

Businesses that operate on a significant scale, typically having extensive operational capacities, manpower, and financial resources.

Profit-maximizing

The strategy or point at which a business makes the highest amount of profit at a given level of production, taking into account its cost structure.

Output

The total amount of goods and services produced by an economic system, company, or machine within a specific period.