A Decrease in an Economy's Output and Prices Would Suggest

question 94

Multiple Choice

A decrease in an economy's output and prices would suggest a:

• A) decrease in aggregate demand.
• B) increase in aggregate demand.
• C) decrease in short-run aggregate supply.
• D) increase in short-run aggregate supply.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity demanded, leading to a stable market condition.

Consumer Surplus

The variation between the total value consumers can and will offer for a good or service and the amount they actually expend.

White Water Rafting

An adventurous outdoor activity which involves navigating rivers with varying degrees of rough water in a raft.

Unit Cost

The expenses a company faces to manufacture, warehouse, and market a single unit of a specific product or service.