Which of the Following Would Raise the Price Level in Both

question 23

Multiple Choice

Which of the following would raise the price level in both the short and long run?

• A)an increase in taxes
• B)an increase in government expenditures
• C)a decrease in the minimum wage
• D)an increase in the capital stock

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Definitions:

Economic Gains

Increases in economic welfare, often measured by improvements in income, production, or satisfaction levels.

Salsa Manufacturers

Companies or entities involved in the production and distribution of salsa, a type of spicy sauce.

Law of Supply

The economic principle stating that as the price of a good increases, the quantity supplied of the good also increases, ceteris paribus.

Law of Demand

An economic principle stating that as the price of a good or service decreases, the quantity demanded increases, and vice versa, holding other factors constant.