Asked by Jocelyn Cooperwood on Jun 29, 2024
Verified
Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?
A) An increase in the quantity of real GDP supplied
B) A decrease in the quantity of real GDP supplied
C) A leftward shift of the aggregate supply curve
D) A rightward shift of the aggregate supply curve
E) An increase in the slope of the aggregate supply curve
Aggregate Supply
The total supply of goods and services that firms in a national economy plan on selling during a specific time period.
Price Level
The average of current prices across the entire spectrum of goods and services produced in the economy, affecting purchasing power and inflation.
Real GDP
The total value of all goods and services produced within a country in a specific period, adjusted for inflation, reflecting the actual productivity of an economy.
- Investigate how variations in price levels influence aggregate demand and aggregate supply.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
B
Explanation :
A decrease in the price level in an economy typically leads to a decrease in the quantity of real GDP supplied because producers are less willing to supply goods and services at lower prices. This is a movement along the aggregate supply curve, not a shift of the curve itself.
Learning Objectives
- Investigate how variations in price levels influence aggregate demand and aggregate supply.