Which Event Causes a Decrease in Aggregate Demand

question 177

Multiple Choice

Which event causes a decrease in aggregate demand?

• A) increases in consumer confidence
• B) increases in taxes
• C) decreases in interest rates
• D) increases in government spending

Grasp the principles of error management theory and its applications in social interactions and decision-making.

Comprehend the certainty effect and its impact on choices.

Recognize the role of reactance theory in behavior and decision-making.

Distinguish between status quo bias and omission bias in decision-making.

---

Definitions:

Average Variable Cost

The total variable cost divided by the number of units produced.

Long-run Supply Curve

A graphical representation showing the relationship between price and quantity supplied over a period long enough for all inputs to be adjusted.

Short-run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that producers are willing to supply in the short run.

Elasticity

A measure of how responsive the demand or supply of a product or service is to changes in price or other factors.