If the Economy's Short-Run Aggregate Supply Curve Is Upward Sloping

question 60

Multiple Choice

If the economy's short-run aggregate supply curve is upward sloping, a decrease in aggregate demand will cause

• A) an increase in the price level and employment.
• B) a decrease in the price level and employment.
• C) an increase in the price level and a decrease in employment.
• D) a decrease in the price level and an increase in employment.

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Definitions:

Holding Cost

The expenses associated with storing inventory over a period of time, including warehousing, insurance, spoilage, and obsolescence costs.

Net Requirements

The total demand for a product minus the quantity already on hand or on order, indicating the actual quantity needed to meet demand.

Gross Requirements

The total amount of materials or components needed before any adjustments for what's currently available or on order.

Net Requirements

The total amount of a product needed, considering the current inventory and scheduled production.