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:

Adhocracy

A flexible, adaptable, and informal organizational structure that is defined by a lack of rigid procedures, roles, and hierarchies, facilitating innovation and creativity.

Mutual Adjustment

A process of coordinating actions and decisions through informal communication and negotiation among parties.

Support Staff

Employees who provide administrative or technical support to an organization, enabling primary operations without being directly involved.

Formalization

The extent to which organizations use rules, procedures, and structured communication to govern behaviors and operations.