Short run changes in the price level can affect real output because A) supply curves of i

Short run changes in the price level can affect real output because

A) supply curves of individual firms are upward sloping.

B) higher prices encourage technological change.

C) some production costs are relatively fixed.

D) the labour force increases as wages increase.

2) Short run changes in the ________ can affect real output because some production costs are relatively fixed.

A) aggregate supply

B) level of government spending

C) price level

D) the labour force

3) In the short run, an increase in the price level induces firms to expand production because

A) prices of inputs are held constant so the higher prices for their product implies that it is profitable to expand production.

B) each firm must keep its production level up to the level of its rivals, and some firms will expand production as the price level increases.

C) the higher prices allow the firm to hire more inputs by offering higher prices to the inputs, which increases productivity and profits.

D) they can increase profits by increasing maintenance costs.

4) In the short run, a decrease in the price level induces firms to contract production because

A) prices of inputs are held constant so the lower prices for their product implies that it is not profitable to contract production.

B) each firm must keep its production level at the level of its rivals, and some firms will contract production as the price level decreases.

C) the lower prices allow the firm to hire more inputs by offering higher prices to the inputs, which increases productivity and profits.

D) they can increase profits by increasing maintenance costs.

5) In the ________, an increase in the price level induces firms to expand production because prices of inputs are held constant so the higher prices for their product implies that it is profitable to expand production.

A) short run

B) long run

C) medium run

D) inflationary period

6) If the price level kept increasing, the short-run aggregate supply curve would get steeper because

A) all the unemployed would eventually be hired.

B) there are limits to how long workers can work long hours and capital can go without proper maintenance.

C) the rate at which capacity can be expanded increases indefinitely.

D) the long-run aggregate supply curve is horizontal.

7) If the price level kept increasing, the short-run aggregate supply curve would get ________ because there are limits to how long workers can work long hours and capital can go without proper maintenance.

A) flatter

B) steeper

C) indefinite

D) vertical

8) If the price level kept increasing, the ________ would get steeper because there are limits to how long workers can work long hours and capital can go without proper maintenance.

A) long-run aggregate supply curve

B) short-run aggregate supply curve

C) aggregate demand curve.

D) labour supply curve.

9) If the price level kept decreasing, the short-run aggregate supply curve would get flatter because

A) all the unemployed would eventually be hired.

B) we could hire any and all resources at the going rate without increasing prices or the price of inputs..

C) the rate at which capacity can be expanded increases indefinitely.

D) the long-run aggregate supply curve is horizontal.

10) If the price level kept decreasing, the short-run aggregate supply curve would get ________ because we could hire any and all resources at the going rate without increasing prices or the price of inputs.

A) steeper

B) flatter

C) indefinite

D) vertical