Along a Short-Run Aggregate Supply Curve,a Decrease in the Price

question 125

Multiple Choice

Along a short-run aggregate supply curve,a decrease in the price level causes

• A) firms to increase their production levels, as the lower prices will increase consumer demand.
• B) no change in output to occur, as at the macroeconomic level, the price level does not affect supply.
• C) firms to reduce their production levels.
• D) production levels to rise as the price of inputs becomes cheaper.

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Definitions:

Scatter Plot

A graphical representation used to display values for typically two variables for a set of data, showing how much one variable is affected by another.

Widely Dispersed

Spread out over a large area or among a large number of people; not concentrated in one place.

Confidence Intervals

An interval of numbers, calculated from statistics of a sample, assumed to include the value of a not yet identified parameter of a population.

Level Of Confidence

A measure of belief in one's abilities or the certainty of an event happening.