The Aggregate Demand Curve Has Its Particular Shape Because of Which

question 17

Multiple Choice

The aggregate demand curve has its particular shape because of which of the following explanations?

• A) A decrease in the aggregate price level will cause an increase in the interest rate and an increase in output.
• B) An increase in the aggregate price level prompts the government to decrease government spending in the hope of bringing down prices.
• C) An increase in the money supply will cause a decrease in the interest rate, an increase in investment, and an increase in output.
• D) As the aggregate price level increases, goods and services become relatively more expensive and individuals respond by decreasing the quantity demanded of goods and services.
• E) A decrease in the aggregate price level will cause an increase in the real wage, a decrease in employment, and a decrease in output.

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Definitions:

Demand Uncertainty

The unpredictability related to the demand for products or services, often causing challenges in supply chain management.

Service Level

A measure of performance that reflects the quality of service provided, often evaluated based on customer satisfaction or the ability to meet delivery times and product availability standards.

Safety Inventory

Additional inventory held to guard against uncertainty in demand or supply, ensuring product availability.

Standard Deviation

A numerical indicator that reflects the degree of spread or variation of data points in a dataset from the average value.