If Prices and Wages Are Sticky, a Decrease in Aggregate

question 61

Multiple Choice

If prices and wages are sticky, a decrease in aggregate demand will cause

• A) an increase in the price level and employment.
• B) a decrease in the price level and employment.
• C) an increase in the price level and a decrease in employment.
• D) a decrease in the price level and an increase in employment.

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Definitions:

Anxiety

A sensation of apprehension or fear, often about something that is going to happen soon or an outcome that is not yet clear.

Learned Response

Behaviors developed through experience or conditioning, as opposed to innate or instinctual reactions.

HPA-axis

Refers to the hypothalamic-pituitary-adrenal axis, a complex set of direct influences and feedback interactions among the hypothalamus, the pituitary gland, and the adrenal glands that regulate stress responses.

PTSD

Post-Traumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a traumatic event, marked by flashbacks, nightmares, and severe anxiety.