In a Slump Aggregate Supply Is Likely to Be Relatively

question 1

Multiple Choice

In a slump aggregate supply is likely to be relatively:

• A) Price inelastic
• B) Demand inelastic
• C) Output sensitive
• D) Price elastic

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Definitions:

Marginal Utilities

refers to the additional satisfaction or utility gained by consuming one more unit of a good or service.

Money Income

Money income includes the total earnings received by an individual or household in the form of wages, salaries, benefits, and returns on investments over a period.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, where individuals substitute away from more expensive goods towards cheaper ones.

Marginal Utility

The added satisfaction or usefulness received from consuming one more unit of a good or service.