If Prices and Wages Are Flexible, a Recession Arising from a Decrease

question 88

Multiple Choice

If prices and wages are flexible, a recession arising from a decrease in aggregate demand will:

• A)decrease the price level.
• B)increase the price level.
• C)increase the interest rate.
• D)increase net exports.

---

Definitions:

Urban Areas

Regions characterized by high population density and vast human features in comparison to areas surrounding them.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, organized into two opposing military alliances.

Urban Sprawl

The uncontrolled expansion of urban areas into the surrounding countryside, often characterized by low-density housing and increased reliance on automobiles.

Scarce Resource

A limited or insufficient supply of something valuable, necessitating careful management and allocation.