In the Short-Run Aggregate Demand Model, Firms Are Generally Assumed

question 24

Multiple Choice

In the short-run aggregate demand model, firms are generally assumed to

• A) set production goals to enhance worker productivity.
• B) respond to changes in demand by adjusting prices until markets clear.
• C) operate at capacity to maximize profits in the long run.
• D) adjust production levels in response to changes in demand.
• E) adjust both prices and production to increase short-run profits.

---

Definitions:

Nonviolent Resistance

A method of protest or activism that rejects the use of physical force, relying instead on various forms of peaceful demonstration to achieve goals.

Civil Disobedience

is the act of refusing to comply with certain laws, demands, or commands of a government or occupying power, typically in a nonviolent form, as a form of political protest.

Gandhi

Mohandas Karamchand Gandhi, an Indian lawyer, anti-colonial nationalist, and political ethicist, who led the campaign for India's independence from British rule through nonviolent resistance.

Centralized

Organized such that control, decision making, or authority is concentrated in a central location or governing body.