Falling Output in the Short Run Could Be Due To

question 85

Multiple Choice

Falling output in the short run could be due to:

• A) a reduction in aggregate demand.
• B) an increase in short-run aggregate supply.
• C) an increase in long-run aggregate supply.
• D) an increase in aggregate demand.

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Definitions:

Behavior Alteration

The modification or change in individual or group behaviors, often initiated by interventions or environmental modifications.

Asymmetric Information

A situation where one party to a market transaction has more information about a product or service than the other. The result may be an under- or overallocation of resources.

Adverse Selection

A situation in insurance and finance where individuals with higher risks are more likely to purchase or participate in a plan, leading to higher than expected costs for insurers or lenders.

Marginal Benefit

The extra utility or satisfaction obtained through the consumption of an additional unit of a good or service.