A Reduction in Aggregate Demand Will Normally Reduce

question 14

Multiple Choice

A reduction in aggregate demand will normally reduce

• A)prices.
• B)real GDP.
• C)employment.
• D)All of the above are correct.

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Definitions:

Degree of Uncertainty

A measure or assessment of the unpredictability or risk associated with a decision, project, or future event.

Human Capital

The combined abilities, expertise, and non-physical resources of people that contribute to producing economic benefits for themselves, their places of work, or their local area.

Simulation

A blend of qualitative and quantitative modelling that incorporates a set of assumptions about relationships among variables in a mathematical algorithm. Simulation can simultaneously model demand and supply, and is very useful for testing the impact of assumptions on the outcome of the model.

Bottlenecks

Points in a process where the flow is impaired or stopped entirely, leading to delays and reduced efficiency.