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:

Three-Stage Model

A model that describes memory processing in three distinct stages: sensory memory, short-term (or working) memory, and long-term memory.

Memory Storage

The process by which information is encoded, stored, and retrieved in the brain, forming the basis for learning and remembering.

Short-Term Memory

The capacity to hold a small amount of information in mind in an active, readily available state for a short period of time.

Capacity

The maximum amount that something can contain or produce, or the ability of an individual or system to execute tasks or processes.