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:

Personal Space

The physical space immediately surrounding an individual, which they consider their own and expect others to respect as a boundary.

Role Conflict

Occurs when there are incompatible demands placed on an individual by two or more statuses held at the same time, leading to stress and difficulty in fulfilling the responsibilities of each role.

Full-time Employee

An individual who works a standard work schedule, typically 35-40 hours per week, for an employer and receives full employment benefits.

Expectations

Beliefs or anticipations about the way things should be or how events will unfold in the future.