Other Things Constant, a Decrease in Aggregate Demand Will

question 168

Multiple Choice

Other things constant, a decrease in aggregate demand will

• A) lead to a decrease in the demand for resources.
• B) cause an increase in the general level of prices.
• C) result in higher nominal wage rates.
• D) reduce the rate of unemployment.

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Definitions:

Hydraulic Fracturing

A technique used in the oil and gas industry to increase extraction rates by injecting fluid into subterranean rocks to create fractures.

Fracking

A process of injecting liquid at high pressure into subterranean rocks, boreholes, etc., to force open existing fissures and extract oil or gas.

Natural Gas

A fossil fuel used primarily for heating, cooking, and electricity generation, consisting mainly of methane and other hydrocarbons.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to market stability.