For most industrial nations, health-care costs have increased faster than the rate of inflation

Refer to Figure 23-1. If the economy is at point L, what will happen?

A) Inventories have risen above their desired level, and firms decrease production. B) Inventories have risen above their desired level, and firms increase production. C) Inventories have fallen below their desired level, and firms increase production. D) Inventories have fallen below their desired level, and firms decrease production.

Ceteris paribus, as the price of a good or service increases

A) people will buy more of it. B) people will buy less of it. C) people will want less of it. D) people will want more of it.