When Economic Conditions Are Weak, the Aggregate Demand for Products

question 61

Multiple Choice

When economic conditions are weak, the aggregate demand for products and services

• A) declines.
• B) increases.
• C) remains the same.
• D) may either decline or increase.

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Definitions:

Dumping

The practice of a company selling a product in a foreign market at a price lower than its cost of production or lower than the price in its domestic market.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, leading to more efficient international trade.

Economics

The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.

Efficiency

The condition in which the economy is producing what people want at least possible cost.