If Prices and Wages Are Flexible, a Decrease in Aggregate

question 56

Multiple Choice

If prices and wages are flexible, a decrease in aggregate demand will in the long run cause only a(n)

• A)decrease in the price level.
• B)increase in the price level.
• C)increase in the unemployment rate.
• D)decrease in real output.

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Definitions:

Environmental Analysis

The process of evaluating the external factors that can affect an organization's success, such as political, economic, social, and technological factors.

Pollution

The introduction of contaminants into the natural environment, causing adverse change and harm to ecosystems.

Competitive Advantage

The attribute(s) that allows a company to outperform its competitors, providing it with a greater market share or profitability.

Sustainable

The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.