An Unexpected Increase in Aggregate Demand Causes

question 129

Multiple Choice

An unexpected increase in aggregate demand causes

• A) the unemployment rate to fall, with no change in the price level.
• B) the price level to rise, but the duration of unemployment will remain constant, so the unemployment rate remains constant.
• C) simultaneously the price level to rise and the unemployment rate to fall.
• D) simultaneously the price level to fall and the unemployment rate to fall.

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Definitions:

Peak-Load Pricing

A pricing strategy that adjusts prices in response to varying levels of demand, typically higher during peak usage times.

Marginal Revenue

The additional income that is generated by selling one more unit of a good or service.

Peak-Load Pricing

A pricing strategy that applies higher charges for goods or services during times of peak demand to manage usage and maximize profit.

Second-Degree Price Discrimination

Practice of charging different prices per unit for different quantities of the same good or service.