Short Run Changes in the Price Level Can Affect Real

question 38

Multiple Choice

Short run changes in the price level can affect real output because

• A)supply curves of individual firms are upward sloping.
• B)higher prices encourage technological change.
• C)some production costs are relatively fixed.
• D)the labour force increases as wages increase.

Understand the basic concepts and types of unemployment.

Recognize the phases of the business cycle and their characteristics.

Comprehend the impact of external shocks on the economy, such as oil price increases.

Determine how various economic indicators, like the misery index, reflect economic health.

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Definitions:

Transfer Price

The price at which goods and services are sold between divisions within the same company.

General Rule

A basic or principal rule that provides guidance or policy in a given area or operation.

Transfer Price

The price at which goods and services are transferred between departments or subsidiaries of the same company.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials or direct labor.