In the Aggregate Demand and Aggregate Supply Model,which Pair of Simultaneous

question 28

Multiple Choice

In the aggregate demand and aggregate supply model,which pair of simultaneous events causes a decrease in output and employment?

• A) lower demand and lower supply
• B) lower demand and higher supply
• C) higher demand and higher supply
• D) higher demand and lower supply

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Definitions:

Common Fixed Expenses

Costs that do not vary with the level of production or sales and are shared among different segments or products of a company.

Break-even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Sales Dollars

The total revenue generated from the sale of goods or services, measured in dollar amount.

Common Fixed Expenses

Expenses that remain constant in total regardless of changes in the level of activity or volume of output.