What Happens If Aggregate Demand Decreases Simultaneously with an Increase

question 64

Multiple Choice

What happens if aggregate demand decreases simultaneously with an increase in short-run aggregate supply,due to anticipated contractionary monetary policy?

• A) The price level remains constant,and real gross domestic product (GDP)decreases.
• B) The price level increases,and real gross domestic product (GDP)increases.
• C) The price level increases,and real gross domestic product (GDP)decreases.
• D) The price level decreases,and real gross domestic product (GDP)remains constant.
• E) The price level increases,and real gross domestic product (GDP)remains constant.

---

Definitions:

Credit Sales

Transactions where the customer purchases goods or services on credit and pays the seller at a later date.

Bank Credit Cards

Payment cards issued by banks that allow cardholders to borrow funds within a pre-approved limit for purchases or cash advances.

Freight-In

The cost associated with transporting raw materials or goods into a facility, typically considered as part of the inventory cost.

Cost of Goods Sold

The total cost of materials and labor directly involved in producing goods sold by a company during a specific period.