What Would Cause Prices to Fall and Output to Rise

question 187

Multiple Choice

What would cause prices to fall and output to rise in the short run?

• A) short-run aggregate supply shifts right
• B) short-run aggregate supply shifts left
• C) aggregate demand shifts right
• D) aggregate demand shifts left

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Definitions:

Supply

The total amount of a product or service available for purchase at any given time.

Demand

is the quantity of a product or service that consumers are willing and able to purchase at various prices at a given time.

Income Elasticity

The ratio of the percentage change in the quantity demanded of a good to the percentage change in consumer income, used to measure how changes in income affect demand.

Negative

Typically associated with undesirable outcomes or attributes, indicating a deficit or reduction.