According to the Theory of Economic Fluctuations, Which of the Following

question 10

Multiple Choice

According to the theory of economic fluctuations, which of the following explains the relationship between aggregate demand and employment during an economic expansion?

• A)Workers decide they have more leisure time than they prefer.As a result they decide to work more, causing more labor to be employed.This causes an increase in production.
• B)An increase in aggregate demand causes real GDP to increase as firms adjust their production.More workers are hired as a result.
• C)An increase in output causes potential GDP to decrease.This causes employment to increase.
• D)A decrease in real GDP causes aggregate demand to increase.As a result, firms hire more workers.
• E)An increase in aggregate demand causes potential GDP to increase.The resulting increase in output causes employment to increase.

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Definitions:

Bilateral Mistake

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

Interpretation

The process of explaining the meaning of something, often applied within legal, financial, and technical contexts to understand texts, actions, or events.

Contractor's Bid

A proposal offered by a contractor to perform a specific job or project at a defined price and under certain conditions.

Enforceable

A term used to describe a legal document, such as a contract or agreement, that can be upheld or compelled by law.