In the short run,the price level will rise whenever there is an economy-wide decrease in unit costs.

Question

Quizplus · Accepted Answer

This statement is incorrect. In the short run, a decrease in unit costs will lead to a decrease in prices, because firms are able to produce goods and services more efficiently, allowing them to decrease their prices while still maintaining profitability. In the long run, however, if the decrease in unit costs is sustained, it may lead to an increase in the money supply and ultimately result in higher prices.

In the Short Run,the Price Level Will Rise Whenever There