When the Price Level Rises and the Money Wage Rate

question 273

Multiple Choice

When the price level rises and the money wage rate does not change,

• A)the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change.
• B)the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.
• C)profits fall and more businesses fail.
• D)existing businesses do not change their level of output.
• E)the quantity of potential GDP increases because the quantity of real GDP supplied increases.

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Definitions:

Book Value

The value of a company's assets minus its liabilities, as recorded on the balance sheet.