The Aggregate Output Demanded for a Given Price Level Occurs

question 181

Multiple Choice

The aggregate output demanded for a given price level occurs at the point where _____

• A) an economy reaches the full employment of labor.
• B) aggregate expenditure equals real gross domestic product (GDP).
• C) actual aggregate expenditure exceeds real gross domestic product (GDP).
• D) inventories of goods and services start increasing.
• E) inventories of goods and services start decreasing.

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Definitions:

Unemployment Rate

The ratio of the labor force that finds itself without employment but are in the hunt for work.

Recession

A period of significant decline in economic activity across the economy, lasting more than a few months, typically visible in GDP, income, employment, and trade.

Business Cycle

The natural rise and fall of economic activity over time, characterized by periods of expansion, peak, contraction, and trough.

Cost-Push Inflation

Inflation caused by an increase in prices of inputs like labor and raw materials, leading to higher costs for products and services.