When Aggregate Demand Declines, Many Firms May Reduce Employment Rather

question 51

Multiple Choice

When aggregate demand declines, many firms may reduce employment rather than wages because wage reductions may

• A)reduce per-unit production costs.
• B)reduce worker morale and work effort and thus lower productivity.
• C)increase the firms' cost of raising financial capital.
• D)reduce the demands for their products.

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Definitions:

Responsible Providers

Entities or individuals who offer services or products with a commitment to ethical practices, reliability, and accountability.

Parents

The caretakers and legal guardians of a child, responsible for their upbringing, support, and education.

Infants

Very young children, typically from birth to one year old, characterized by rapid physical and cognitive development.

Immigrants

Immigrants are people who have moved to a country other than their native one with the intention of settling there, often in search of better living conditions or job opportunities.