You Can Generally Distinguish an Aggregate Supply-Caused Recession from an Aggregate

question 186

Multiple Choice

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

• A)real GDP will rise in an aggregate supply recession.
• B)the price level will fall in an aggregate supply recession.
• C)the price level will fall in an aggregate demand recession.
• D)real GDP will rise in an aggregate demand recession.

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Definitions:

Capital Assets

Long-term assets acquired for operation and not for resale, typically including buildings, machinery, and equipment.

Direct Method

A method of allocating service department costs directly to producing departments without considering interactions among service departments.

Operating Activities

Activities that constitute the primary or main activities of an organization, including sales, supply, and production functions, often reflected in the cash flow statement.

Indirect Method

A technique used in comprehensive cash flow statements, it adjusts net income for non-cash transactions and changes in working capital to calculate net cash from operating activities.