If the price level of what firms produce is rising across an economy, but the costs of production are constant, then:
A. the maximum potential GDP will be exceeded.
B. increase in quantity produced won’t be large.
C. a majority of industries will start running into limits.
D. higher profits will induce expanded production.
Answer:D
If the price level of what firms produce is rising across an economy, but the costs of production are constant, then:
A. the maximum potential GDP will be exceeded. B. increase in quantity produced won’t be large. C. a majority of industries will start running into limits. D. higher profits will induce expanded production.
Explanation: Type: Multiple Choice