If There Is an Unanticipated Increase in Aggregate Demand, Which

question 185

Multiple Choice

If there is an unanticipated increase in aggregate demand, which of the following is most likely to occur?

• A) a reduction in the price level
• B) an increase in the rate of unemployment
• C) an increase in employment
• D) an expansion in the federal budget deficit

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Definitions:

Unit Elastic

Describes a situation where the change in quantity demanded or supplied is exactly proportional to the change in price.

Midpoint Method

A method employed in economics for determining demand or supply elasticity through calculating the mean of the initial and final prices and quantities.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to a change in its price.

Strategic Leader

A person who guides an organization towards long-term goals by making visionary decisions and inspiring others.