Law of Short-Run Aggregate Supply Quiz
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Questions and Answers

What is the impact of lower prices according to the law of short-run aggregate supply?

  • Create incentives for decreased production since consumers prefer lower prices
  • Create incentives for increased production through higher profits
  • Result in stability in the market
  • Stimulate more consumer purchases (correct)

How do higher prices influence production in the short-run aggregate supply law?

  • Stimulate more consumer purchases
  • Create incentives for increased production through higher profits (correct)
  • Lead to decreased demand for goods and services
  • Result in lower profits for producers

What effect do higher prices have on production according to the short-run aggregate supply law?

  • Stimulate more consumer purchases
  • Have no impact on production levels
  • Lead to stability in the market
  • Create incentives for decreased production since consumers prefer lower prices (correct)

Why do lower prices create incentives for increased production according to the short-run aggregate supply law?

<p>To stimulate more consumer purchases (B)</p> Signup and view all the answers

How do higher prices influence consumer behavior according to the short-run aggregate supply law?

<p>Create incentives for decreased production since consumers prefer lower prices (C)</p> Signup and view all the answers

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