Classical Economists Believe That When Aggregate Demand Changes,the Economy Remains

question 143

Multiple Choice

Classical economists believe that when aggregate demand changes,the economy remains at full employment because

• A) changes in aggregate demand do not affect prices.
• B) prices are very flexible.
• C) the government requires that the economy perform at full employment.
• D) international trade offsets any changes in demand.
• E) consumers and producers are not a part of aggregate demand.

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Definitions:

Responsibility Accounting

A system of accounting that segments financial information by areas of responsibility, allowing managers to be held accountable for their areas' financial performance.

Not-for-Profit Entities

Organizations that operate for purposes other than making a profit, often focusing on social, educational, or charitable endeavors.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenues.

Responsibility Center

A unit within an organization, such as a department or division, accountable for controlling costs, generating revenues, or managing assets.