If There Is Speculation That the Economy Will Soon Enter

question 36

Multiple Choice

If there is speculation that the economy will soon enter a recession, which means that our incomes will probably fall, then the immediate effect on the economy now will be that the

• A) aggregate supply curve will shift to the left.
• B) aggregate demand curve will shift to the right.
• C) price level will rise and real output will rise.
• D) price level will fall and real output will fall.

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Definitions:

The Zipper

A fastening device consisting of two flexible strips of metal or plastic with interlocking projections closed or opened by pulling a slider along them.

Employ Older Workers

The act of hiring or continuing to employ individuals who are older, often beyond traditional retirement age, recognizing their experience and value in the workforce.

Small Businesses

Companies with fewer employees and lower revenue compared to larger corporations, often privately owned.

Large Businesses

Companies that operate on a large scale, often with extensive human and capital resources, and have a significant impact on the market and economy.