A Decrease in Aggregate Supply Will Tend to Cause the Price

question 82

Multiple Choice

A decrease in aggregate supply will tend to cause the price level to:

• A)rise and GDP to fall.
• B)rise and GDP to rise.
• C)rise and the unemployment rate to fall.
• D)fall and GDP to rise.
• E)fall and the unemployment rate to rise.

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Definitions:

Preferred Stock

A type of stock that provides a specific dividend that is paid before any dividends are paid to common stockholders, often with no voting rights.

Zero Growth

refers to a situation where a company or economy is not experiencing any increase in its output, sales, or other financial indicators over a period.

Cumulative Dividend

A feature of preferred stock that mandates the payment of any missed dividends before dividends can be distributed to other shareholders.