An Increase in Aggregate Demand Is Harmful Because

question 69

Multiple Choice

An increase in aggregate demand is harmful because

• A) workers with sticky wages are paying more for goods and services.
• B) firms have sticky input prices and earn less profit.
• C) unemployment rises.
• D) output has risen above the full-employment level.
• E) wages will have to fall in the long run.

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Definitions:

Corporate Law

A body of law that regulates the formation, governance, dissolution, and administration of corporations.

Sole Proprietorship

A business structure where a single individual owns, manages, and is personally responsible for all aspects of the business.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights and a stake in its performance.

Lawsuit

A legal action brought in court by one party against another for the purpose of obtaining a remedy or resolution for a dispute.