Consider the AD/AS Model After Factor Prices Have Fully Adjusted

question 56

Multiple Choice

Consider the AD/AS model after factor prices have fully adjusted to output gaps.A reduction in the level of potential output,with aggregate demand constant,will

• A)leave real output unaffected and increase the price level.
• B)decrease real output and decrease the price level.
• C)decrease real output and leave the price level unchanged.
• D)decrease real output and increase the price level.
• E)increase real output and decrease the price level.

Understand the impact of changes in factor prices on the demand and quantity demanded of labor.

Comprehend the effect of technological changes and health reports on labor demand.

Understand the marginal productivity theory of income distribution.

Distinguish between the demand for labor and the quantity demanded of labor.

---

Definitions:

Consumer Lease

A legal agreement where a consumer agrees to rent personal property, like a car or household appliance, for personal, family, or household use for a period of time.

State Statute

A written law passed by a legislative body at the state level.

Usage Of Trade

Any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question.

Commercial Practices

Activities, methods, and ethics involved in conducting business and trading of goods and services in the marketplace.