Given an Aggregate Supply Curve,a Decrease in Aggregate Demand Will

question 53

Multiple Choice

Given an aggregate supply curve,a decrease in aggregate demand will:

• A)increase the real interest rate.
• B)increase real GDP.
• C)increase the price level.
• D)decrease the real exchange rate.
• E)decrease real GDP.

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Definitions:

Fringe Benefits

Additional benefits offered to employees beyond salaries and wages, including health insurance, retirement plans, and paid vacation.

Nominal Wage

The amount of money paid to an employee before adjustments for inflation, often expressed as an hourly or annual figure.

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services over time.

Real Wage

Adjusted for inflation, it represents the purchasing power of the wage rate.