From the Perspective of Classical Macroeconomic Theory, If Aggregate Spending

question 58

Multiple Choice

From the perspective of classical macroeconomic theory, if aggregate spending was temporarily less than output,

• A)product price would increase, but resource prices would decrease.
• B)product price would decrease, but resource prices would increase.
• C)product and resource prices would decrease, so that aggregate spending would rise, expanding output.
• D)product and resource prices would increase, so that aggregate spending would equal output.

---

Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, representing the value at which it is issued.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and often pays dividends.

Cumulative

Refers to the total amount accumulated over a period of time, often used to describe amounts of money or measurements that build up until a specific point is reached.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which may differ from its market value.