In the Short Run,a Decrease in the Price Level Induces

question 16

Multiple Choice

In the short run,a decrease in the price level induces firms to contract production because

• A)prices of inputs are held constant so the lower prices for their product implies that it is not profitable to contract production.
• B)each firm must keep its production level at the level of its rivals,and some firms will contract production as the price level decreases.
• C)the lower prices allow the firm to hire more inputs by offering higher prices to the inputs,which increases productivity and profits.
• D)they can increase profits by increasing maintenance costs.

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Definitions:

Traditional Role

Established patterns of behavior expected of individuals in specific positions or settings within a cultural or social context.

Priest

A religious leader authorized to perform the sacred rituals of a religion, often acting as an intermediary between humans and one or more deities.

Shaman

A person regarded as having access to, and influence in, the world of good and evil spirits, often within indigenous and tribal societies, performing healings and rituals.

Differences

The state or condition of not being the same; variations between entities in characteristics, qualities, or properties.