Based on Your Understanding of the AS- AD Model, Which

question 21

Multiple Choice

Based on your understanding of the AS- AD model, which of the following is an incorrect statement about the short- run adjustment process for the macroeconomy?

• A) A decrease in output decreases employment.
• B) Output in excess of the natural level leads to higher prices.
• C) An increase in demand increases output.
• D) An increase in unemployment leads to higher prices.
• E) A decrease in output below the natural level leads to lower nominal wages.

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Definitions:

Unionized Organization

A workplace where a labor union represents the interests of the employees in negotiations with management.

Reinstatement

The act of restoring someone or something to a previous position or status, often used in employment contexts when a job is returned to a previously terminated employee.

Arbitrator

A neutral third party chosen to resolve disputes between parties in an arbitration proceeding.

Statutory Right

A right granted and protected under a specific statute or law by a legislative body.