Which of the Following Events Will Cause an Increase in the Aggregate

question 9

Multiple Choice

Which of the following events will cause an increase in the aggregate price level?

• A)an increase in the unemployment benefits
• B)a reduction in the markup
• C)a reduction in Pe
• D)an increase in the unemployment rate
• E)none of the above

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Definitions:

Profit Maximizing

The process of increasing the difference between total revenue and total cost to achieve the highest possible profit.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production, keeping all other factors constant.

Wage Rate

The amount of money workers are paid per unit of time, usually specified in terms of an hour, representing compensation for labor services.

Employment

The condition of having paid work or being engaged in a productive activity.