If Wheat Prices Rose by 12 Percent When Producers Thought

question 84

Multiple Choice

If wheat prices rose by 12 percent when producers thought other prices were rising by 15 percent,

• A)wheat output would tend to rise as a result.
• B)wheat output would tend to fall as a result.
• C)wheat output would tend to remain unchanged as a result.
• D)we could not predict the likely change in wheat output that would result.

---

Definitions:

Cost of Living

The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

Real Value

The value of an object or service adjusted for inflation, representing its purchasing power.

Nominal Value

The face value of a financial instrument or an item's price in terms of money, without adjustment for inflation or other factors.

Price Level

The ongoing average price for the economy's produced goods and services.