If the Economy's AS Curve Is Upward Sloping, a Negative

question 79

Multiple Choice

If the economy's AS curve is upward sloping, a negative shock to aggregate demand will result in

• A)an increase in both real GDP and prices.
• B)a decrease in both real GDP and prices.
• C)a decrease in prices but no change in real GDP.
• D)an increase in prices and no change in real GDP.
• E)an increase in real GDP and no change in prices.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Economic Value Added

A measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Return On Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.