A Decrease in Aggregate Demand in the Short Run Will

question 257

Multiple Choice

A decrease in aggregate demand in the short run will reduce

• A) both real output and the price level.
• B) the price level and increase the real domestic output.
• C) the real domestic output and have no effect on the price level.
• D) the price level and have no effect on real domestic output.

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Definitions:

Weighted Average

It's a calculation that takes into account the varying degrees of importance of the numbers in a data set, often used in determining the cost of inventory.

Erratic Changes

Unpredictable fluctuations that do not follow a set pattern or trend, often affecting financial markets or economic conditions.

Inventory Cost Method

An accounting technique used to determine the value of a business's inventory and cost of goods sold, such as FIFO (First In, First Out) or LIFO (Last In, First Out) methods.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating financial performance over a specific period.