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

question 48

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 become cheaper.

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Definitions:

Actual Express Authority

The specific powers explicitly granted by one party to another, typically in a principal-agent relationship, where the agent is empowered to act on the principal's behalf.

Purchase Price

Refers to the amount of money paid or agreed to be paid by a buyer to acquire an asset or service.

Respondeat Superior

Respondeat Superior is a legal doctrine holding that an employer is responsible for the actions of employees performed within the course of their employment.

Employee's Negligence

Situations where an employee’s failure to exercise reasonable care in their duties results in harm or damage.