At Low Levels of Output, the Economy Can Expand with Little

question 345

Multiple Choice

At low levels of output, the economy can expand with little or no increase in the overall price level because

• A) at low levels of output the aggregate supply curve is negatively sloped.
• B) people will be expecting the price level to fall.
• C) there is excess supply so prices are kept low.
• D) firms likely hold excess labor and capital, and production can be increased without causing input prices to increase.

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Definitions:

Little Autonomy

A situation where there is scant or limited independence or self-governance within a subsystem or entity.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product more efficiently.

Henry Ford

An American industrialist and founder of the Ford Motor Company, he revolutionized the automobile industry with assembly line production.

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An location where people engage in physical or intellectual tasks in order to earn a living; it can vary greatly in form, from office buildings to remote settings.