In the Long Run, If the Price Level Decreases, Then

question 99

Multiple Choice

In the long run, if the price level decreases, then the economy's output level will:

• A) Increase initially, but then fall back again
• B) Increase
• C) Decrease
• D) Stay the same

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Definitions:

Taxes

Mandatory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Federal Transfer Payments

Payments from the federal government to individuals, states, or other governmental entities without any requirement for repayment.

GDP

GDP, the cumulative market price of all ultimate goods and services produced within the confines of a country over an allotted timeframe.

Government

The system or group of people governing an organized community, often a state, including institutions and mechanisms that regulate and guide the community or society.