Suppose GDP Is Currently at the Full Employment Level

question 16

Multiple Choice

Suppose GDP is currently at the full employment level. If aggregate demand falls, this will most likely lead to:

• A) inflation.
• B) an increase in output.
• C) no change in output.
• D) unemployment.

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders' equity.

Operating Effectiveness

A measure of how well an organization is managing its core business functions to achieve its objectives efficiently and effectively.

Percentage Increase

The amount of increase in a value or quantity, expressed as a percentage of its original value.