If Policymakers Decrease Aggregate Demand,then in the Short Run the Price

question 68

Multiple Choice

If policymakers decrease aggregate demand,then in the short run the price level

• A)falls and unemployment rises.
• B)and unemployment fall.
• C)and unemployment rise.
• D)rises and unemployment falls.

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Definitions:

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Shortage Costs

Expenses incurred when demand exceeds supply, including lost sales and the cost of expedited orders or production to meet demand.

Restrictive Financing Policy

A financial strategy that involves maintaining lower levels of current assets or using more short-term financing to fund those assets, aiming to reduce costs but increase risk.