Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the ?

Related Mcqs:

Which of the following statements about economic fluctuations is true ?

A. None of these answers B. A depression is a mild recession C. A variety of spending income, and output measures can be used to measure economic fluctuation because most macroeconomic quantitties tend to fluctuate together D. A recession is when output rises above the natural rate of output...

Which of the following would not cause a shift in the long-run aggregate supply curve ?

A. All of these answers shift the long-run aggregate supply curve B. An increase in the available capital C. An increase in the available labour D. An increase in price expectations...

According to the interest rate effect aggregate demand slopes downward (negatively) because ?

A. lower prices increase money holdings decrease lending interest rates rise, and investment spending falls B. lower prices increase the value of money holding and consumer spending increases C. lower prices decrease the value of money holdings and consumers spending decreases D. lower prices reduce money holdings increase lending interest rates fall, and investment spending … According to the interest rate effect aggregate demand slopes downward (negatively) because ?Read More...

Which of the following is not a reason why the aggregate demand curve slopes downward ?

A. The exchange-rate effect B. The wealth effect C. The classical dichotomy/monetary neutrality effect D. The interest-rate effect...

According to the wealth effect aggregate demand slopes downward (negatively) because ?

A. lower prices increase the value of money holding and consumers spending increase B. lower prices decrease the value of money holding and consumers spending decrease C. lower prices reduce money holding increase lending, interest rates fall and investment spending increase D. lower prices increase money holding decrease lending, interest rates rise and investment spending … According to the wealth effect aggregate demand slopes downward (negatively) because ?Read More...