An assumption central to the short run analysis of the goods and services produced by an economy is that
A) a firm's operating objective is to maximize profits.
B) consumers operate according to the principle of self-interest.
C) aggregate demand determines the amount of good produced.
D) governments fulfill their role of guaranteeing property rights.
E) monetary policy assures an environment of stable prices.

Question

Quizplus · Accepted Answer

In the short run, the level of goods and services produced in an economy is primarily determined by aggregate demand, as firms adjust their production to meet the demand for their products.

An Assumption Central to the Short Run Analysis of the Goods