According to the Theory of Economic Fluctuations, Which of the Following

question 10

Multiple Choice

According to the theory of economic fluctuations, which of the following explains the relationship between aggregate demand and employment during an economic expansion?

• A)Workers decide they have more leisure time than they prefer.As a result they decide to work more, causing more labor to be employed.This causes an increase in production.
• B)An increase in aggregate demand causes real GDP to increase as firms adjust their production.More workers are hired as a result.
• C)An increase in output causes potential GDP to decrease.This causes employment to increase.
• D)A decrease in real GDP causes aggregate demand to increase.As a result, firms hire more workers.
• E)An increase in aggregate demand causes potential GDP to increase.The resulting increase in output causes employment to increase.

Comprehend the concept of opportunity cost in practical scenarios, such as governmental spending decisions.

Identify key factors that enable full production in an economy, including technology and resource utilization.

Grasp the conditions and indicators of economic growth and the factors that spur such growth.

Understand the implications of the law of increasing cost and factor suitability in resource allocation.

---

Definitions:

Absorbed

The process by which substances are taken into a more condensed form or into a different medium, such as liquids being taken up by solids.

Small Molecules

Chemical substances that are not very large, typically having a low molecular weight, and often used in pharmacology and biochemistry.

Calcium

A mineral essential for human life, involved in bone formation, muscle contraction, and many other physiological processes.

Phosphorus

A chemical element that plays a vital role in biological molecules like DNA and ATP.