A Decrease in Aggregate Demand Will Cause

question 346

Multiple Choice

A decrease in aggregate demand will cause

• A) prices to fall according to classical economists, and unemployment to increase according to Keynes.
• B) prices to fall and unemployment to increase according to both classical economists and Keynes.
• C) aggregate supply to fall according to classical economists, and prices to fall according to Keynes.
• D) aggregate supply to fall according to Keynes, and unemployment to increase according to classical economists.

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Definitions:

Unique Contribution

A unique contribution refers to a specific, novel input or insight provided by a researcher or study, distinct from previous work in the field.

Standard Error

A statistical measure that quantifies the variability or spread of sample means around the population mean.

Variance

The square of the standard deviation and another measure of a distribution’s spread or dispersion.

Independent Variable

The variable that is manipulated or controlled by the researcher to test its effect on the dependent variable.