When Aggregate Demand Declines, the Price Level May Remain Constant

question 139

Multiple Choice

When aggregate demand declines, the price level may remain constant, at least for a time, because

• A)firms individually may fear that their price cut may set off a price war.
• B)menu costs rise.
• C)price cuts tend to increase efficiency wages.
• D)product markets are highly competitive.

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Definitions:

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Model Nonprofit Corporation Act

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