Suppose That, as Expected, Aggregate Demand in the Economy Sharply

question 160

Multiple Choice

Suppose that, as expected, aggregate demand in the economy sharply declines. New classical economists say that the price level will _____________ and real output will ____________.

• A) fall; remain constant
• B) fall; fall
• C) remain constant; fall
• D) remain constant; rise

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Definitions:

Consolidation

Consolidation refers to the process of combining the financial statements of separate business entities, typically parent and subsidiary companies, into a single financial statement.

AASB 3

is an Australian accounting standard that specifies the procedures for accounting and reporting business combinations.

Business Combination

A transaction or other event in which an acquirer gains control over one or more businesses.