If Aggregate Demand Decreases, And, as a Result, Real Output

question 224

Multiple Choice

If aggregate demand decreases, and, as a result, real output and employment decline but the price level remains unchanged, it is most likely that

• A)the money supply has declined.
• B)the price level is inflexible downward and a recession has occurred.
• C)cost-push inflation has occurred.
• D)productivity has declined.

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Definitions:

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences.

Nobel Prize

Prestigious international awards given annually in several categories including Peace, Literature, and various sciences, to individuals or organizations that have made significant contributions to humanity.

Flynn Effect

The observed increase in IQ scores over time across the world, attributed to improvements in nutrition, education, and environmental factors.

IQ Scores

IQ scores, or Intelligence Quotient scores, are a standard measure used to assess human intelligence, typically through standardized tests yielding a score that aims to place an individual’s intelligence level on a scale.