When Current Output Rises Above Potential Output, We Hire Fewer

question 31

True/False

When current output rises above potential output, we hire fewer workers, which reduces the costs of production. The change in inflation will be negative.

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Definitions:

AC

Average Cost; the total cost of production divided by the quantity produced, indicating the cost per unit of output.

Monopoly

An economic situation where a sole seller dominates the market by providing a product that has no closely comparable substitutes.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price level and period.

Price

The sum projected, mandated, or allocated in money for acquiring something.