Which of the Following Explains Why an Economy That Has

question 96

Multiple Choice

Which of the following explains why an economy that has moved away from long-run equilibrium due to a fall in aggregate demand should avoid deflation?

• A) Deflation causes a rightward shift in the short-run aggregate supply curve.
• B) Deflation is usually accompanied by an increase in employment.
• C) Encouraged by lower prices, households increase the demand for goods and services.
• D) Consumers often postpone consumption in the expectation that prices will fall further.

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Definitions:

Art of Theater

The craft and study of performing arts, including acting, direction, and production, aimed at presenting stories on stage.

Aristotle

An ancient Greek philosopher and polymath, whose extensive works laid the foundation for much of Western philosophy, science, and ethics.

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The suppression or prohibition of speech, public communication, or other information which may be considered objectionable, harmful, sensitive, or inconvenient as determined by governments, media outlets, or other controlling bodies.

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An ancient Greek philosopher who was a student of Socrates and the teacher of Aristotle, known for his works that laid the foundation for much of Western philosophy.