In the Long Run, a Decrease in Aggregate Demand, All

question 108

Multiple Choice

In the long run, a decrease in aggregate demand, all other things unchanged, will cause the price level to

• A) increase and potential output to increase.
• B) decrease and potential output to decrease.
• C) increase and potential output to remain stable.
• D) decrease and potential output to remain stable.

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Definitions:

Stockout

A situation where items are not in stock and unavailable for sale or use, leading to potential loss of sales.

Uncertainty of Demand

The unpredictable nature of consumer demand, making it challenging to accurately forecast sales or production needs.

Standard Deviation

A statistic that measures the dispersion or variability within a set of data points or distribution.

Lead Time

The amount of time that passes from the start of a process until its completion, often used in the context of product manufacturing and delivery.