What Impact Will an Unexpected Increase in Aggregate Demand Have

question 26

Multiple Choice

What impact will an unexpected increase in aggregate demand have on real wages?

• A)It will increase real wages in the short run but not the long run.
• B)It will decrease real wages in the short run but not the long run.
• C)It will decrease real wages in the short run and the long run.
• D)It will increase real wages in the short run and the long run.

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Definitions:

Adjusted Cost

The net cost of an asset after adjustments for various factors such as depreciation or amortization.

Realized Capital Gains

The increase in value of an investment, when converted to cash.

Taxable Difference

The amount by which taxable income exceeds tax deductions in a given period, impacting the amount of tax owed.

Adjusted Cost

Adjusted cost refers to the modified cost of an investment, taking into account factors such as amortization, depreciation, or adjustments made for tax purposes.