In the Classical Model of the Price Level, Prices Are

question 275

Multiple Choice

In the classical model of the price level, prices are _____, the short-run aggregate supply curve is vertical, and as a result, a decrease in the money supply leads to _____ in the aggregate price level.

• A) sticky; a more than proportional decrease
• B) flexible; a proportional decrease
• C) sticky; a more than proportional increase
• D) flexible; a proportional increase

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Definitions:

Cash Budget

A forecast of cash inflows and outflows over a specific period, used to estimate a company's short-term liquidity needs.

Cash Balance

Cash balance refers to the amount of cash that a company or an individual has available at any given time.

Cash Payments

Cash payments refer to transactions where cash is used to settle the payment for goods, services, or obligations.

Cash Budget

An estimation of cash inflows and outflows for a business over a specific period, used for managing liquidity.