What Impact Will a Negative Demand Shock Have on the Main

question 69

Multiple Choice

What impact will a negative demand shock have on the main measures of economic performance?

• A)Real GDP will increase, inflation will increase, and unemployment will decrease.
• B)Real GDP will decrease, inflation will decrease, and unemployment will increase.
• C)Real GDP will decrease, inflation will increase, and unemployment will increase.
• D)Real GDP will increase, inflation will decrease, and unemployment will decrease.

---

Definitions:

Acid-Test Ratio

A stringent indicator that measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Gross Margin Percentage

A financial metric that measures the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage; it shows the proportion of money available to cover other expenses and profit.

Return On Total Assets

A financial ratio that measures the profitability of a company relative to its total assets, indicating how effectively a company is using its assets to generate earnings.