Which of the Following Would Have Caused Aggregate Demand to Decrease

question 137

Multiple Choice

Which of the following would have caused aggregate demand to decrease during the Great Depression?

• A) a decrease in tax rates
• B) an increase in international trade
• C) a decrease in the money supply
• D) an increase in the labor supply
• E) an increase in consumer sentiment

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Definitions:

Financial Distress Costs

Costs associated with a company's financial trouble leading to bankruptcy or restructuring, including legal fees, loss of goodwill, and disruption of operations.

Corporate Default

The failure of a company to fulfill its financial obligations, such as missing a debt payment or failing to repay a loan as agreed.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting business, such as wages, rent, and materials.

Restructuring

The process of reorganizing a company's structure, finances, or operations to improve efficiency or to adapt to new market conditions.