Which of the Following Will Most Likely Occur in the Short

question 112

Multiple Choice

Which of the following will most likely occur in the short run if long-run equilibrium is disturbed by an unanticipated decrease in aggregate demand?

• A) a decrease in output and a higher price level
• B) an increase in output and a higher price level
• C) a decrease in output and a lower price level
• D) an increase in output, while prices remain unchanged

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Definitions:

EPS

Earnings Per Share, a financial metric that divides a company's profit by the number of its outstanding shares to indicate the company's profitability on a per-share basis.

Capital

Financial resources or assets owned by a business or individual that are useful in furthering development and generating income.

Debt

An amount of money borrowed by one party from another, under the condition of repayment with interest.

Interest Tax Benefit

The financial advantage gained through deducting interest payments on debt from taxable income.