An Increase in Aggregate Demand When the Economy Is Operating

question 45

Multiple Choice

An increase in aggregate demand when the economy is operating ________ is likely to result in an increase in the overall price level and ________ in output.

• A) below full capacity; a decrease
• B) below full capacity; no increase
• C) at full capacity; a decrease
• D) at full capacity; no increase

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Definitions:

Financial Institutions

Businesses that provide financial services, including banks, credit unions, and insurance companies.

Compounded Semi-Annually

Interest on an investment or loan calculated twice a year, adding each interest payment to the principal.

Principal

The original amount borrowed or invested.

Payments 13 to 24

Refers to the series of payments that are made from the thirteenth to the twenty-fourth installment in a sequence of payments.