When Would an Increase in Aggregate Demand Have the Greatest

question 17

Multiple Choice

When would an increase in aggregate demand have the greatest short-run effect on real output?  

• A) when the aggregate demand curve is horizontal 
• B) when the aggregate demand curve is vertical 
• C) when the short-run aggregate supply curve is vertical 
• D) when the short-run aggregate supply curve is horizontal

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Definitions:

Service Inventory

Intangible goods in a service operation that cannot be stored or inventoried in the traditional sense, such as available hotel rooms or hours of consulting.

Service Stockout

Occurs when a service provider cannot meet customer demand due to insufficient resources or capacity, leading to customer dissatisfaction.

Service Level

A measure of the quality of a company's service, typically in terms of meeting customer needs or the percentage of customer demands met on time.