An Increase in Aggregate Demand Is Harmful Because

question 69

Multiple Choice

An increase in aggregate demand is harmful because

• A) workers with sticky wages are paying more for goods and services.
• B) firms have sticky input prices and earn less profit.
• C) unemployment rises.
• D) output has risen above the full-employment level.
• E) wages will have to fall in the long run.

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Definitions:

Strict Foreclosure

A legal process by which a secured lender can take possession of the collateral property without the need to sell it, typically when the value of the collateral is less than the debt owed.

Satisfaction of Debt

Satisfaction of Debt is the fulfillment of a financial obligation, such as the repayment of a loan, thereby releasing the debtor from further liability.

Owner's Rights

Legal rights conferred to owners, entitling them to use, enjoy, and dispose of their property as they see fit.

Strict Foreclosure

A legal process by which the secured lender obtains the title to the mortgaged property without the sale thereof, when the borrower fails to meet the obligations.