If Prices and Wages Are Inflexible Downward, a Decrease in Aggregate

question 64

Multiple Choice

If prices and wages are inflexible downward, a decrease in aggregate demand will

• A) reduce the price level but not real output.
• B) increase short-run aggregate supply.
• C) decrease short-run aggregate supply.
• D) reduce real output but not the price level.

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Definitions:

MIL L 2105D

This refers to a military specification for lubricants, oils, and greases used in mechanical systems.

API GL-5

A classification for gear lubricants defined by the American Petroleum Institute, indicating suitability for high-speed, shock-load, and high-torque applications.

API GL-3

Designates a classification of gear lubricants by the American Petroleum Institute for moderate conditions, often used in non-hypoid axles and transmissions not subject to extreme pressures.

Heavy Truck Differential Carriers

Components designed to house the differential assembly in heavy trucks, aiding in the distribution of engine power to the wheels, allowing for different rotations.