An Increase in Aggregate Demand Will Have the Following Effect

question 43

Multiple Choice

An increase in aggregate demand will have the following effect on potential output:

• A) potential output will increase.
• B) potential output will decrease.
• C) potential output will increase at first and then decrease.
• D) there won't be a change in potential output from an increase in aggregate demand.

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Definitions:

Security Agreement

A written agreement that creates a security interest.

Purchase Money Security Interest (PMSI)

A special type of security interest that allows creditors to obtain priority in a debtor's collateral, provided the credit was used to purchase the collateral.

Perfected

The state of a security interest when the secured party has done everything that the law requires to give the secured party greater rights to the goods than others have.

Attaches

In legal parlance, attaches means to legally seize or take control of property, often in the context of securing a debt or executing a court order.