Suppose Nominal Aggregate Demand Falls by 3 Percent While Nominal

question 108

Multiple Choice

Suppose nominal aggregate demand falls by 3 percent while nominal wages are fixed.If firms were to lower their prices by 3 percent,this would ________ the drop in real output,with such pricing ________ an assumption that firms are profit-maximizers.

• A)prevent,in violation of
• B)prevent,consistent with
• C)worsen,in violation of
• D)worsen,consistent with

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Definitions:

Generative

Refers to processes capable of producing or creating new content, structures, patterns, or ideas.

Fiduciary

A person or organization that acts on behalf of another person or persons, putting their clients' interest ahead of their own, with a duty to preserve good faith and trust.

Strategic

Involving the careful planning and management of resources to achieve specific objectives and ensure long-term success.

Ethos of Transparency

A guiding principle that emphasizes openness, communication, and accountability, particularly within organizations and institutions.