What Is the Primary Reason That Changes in Total Spending

question 179

Multiple Choice

What is the primary reason that changes in total spending lead to cyclical changes in output and employment?

• A)Government is unable to respond by changing the amount of money in circulation.
• B)Changes in total spending cause supply shocks that cause cyclical variation.
• C)Prices are sticky in the short run.
• D)Prices are flexible in the long run.

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Definitions:

Notice of Assignment

A formal notification indicating that a particular assignment of rights or interests has been made.

Vicarious Performance

A principle which allows one person to perform their obligations through another, typically in the context of employment or contractual duties.

Vicarious Performance

Vicarious performance refers to situations where a third party performs contractual duties on behalf of one of the original parties involved in the contract.

Novation

The act of replacing one obligation with another by mutual agreement between all parties involved, essentially creating a new contract while cancelling the old one.