In the Aggregate Demand-Aggregate Supply Model, If Entrepreneurs Become Convinced

question 19

Multiple Choice

In the aggregate demand-aggregate supply model, if entrepreneurs become convinced that future profitability of capital has increased,

• A)current output will fall, but the price level will rise.
• B)current output will rise, but the price level will fall.
• C)current output and the price level will both rise.
• D)current output and the price level will both fall.

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Definitions:

Contract

An accord among several parties that is legally obligatory and subject to legal enforcement.

Duress

A condition whereby a person performs an act as a result of violence, threat, or other pressure against the person.

Unduly Influenced

Refers to a situation where a person is pressured or coerced into making a decision or action that they would not normally agree to under fair circumstances.

Intentional Wrongful Disclosure

The deliberate sharing of confidential or protected information without authorization.