Which of the Following Events Causes an Increase in Aggregate

question 25

Multiple Choice

Which of the following events causes an increase in aggregate demand?

• A) decreasing wealth
• B) falling interest rates
• C) decrease in government spending
• D) rising imports

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, where no single entity has a significant impact on prices.

Short Run

A period in which at least one factor of production is fixed, limiting the ability to adjust production rapidly.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.

Marginal Cost

The investment needed to manufacture an extra unit of a product or service.