If Aggregate Demand Decreases and Aggregate Supply Decreases,the Level of Real

question 18

Multiple Choice

If aggregate demand decreases and aggregate supply decreases,the level of real output will

• A)Decrease,and the price level will definitely decrease.
• B)Decrease,and the price level will definitely increase.
• C)Either increase or decrease,but the price level will stay the same.
• D)Decrease,but the price level is indeterminate.

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Definitions:

Economic Profit

The profit or loss that a company makes, calculated by subtracting both the explicit and implicit costs from total revenues.

MR Curve

The Marginal Revenue curve represents the change in total revenue that results from selling one additional unit of a good or service.

Opportunity Costs

The value of the best alternative forgone when a decision is made to pursue a certain action.

MR

Marginal Revenue, the increase in revenue that results from selling one additional unit of a product.