If a Decrease in the Growth Rate of AD Leads

question 65

Multiple Choice

If a decrease in the growth rate of AD leads to a decrease in real GDP in the short run:

• A) the decrease in AD could have been correctly anticipated.
• B) the decrease in AD could have been less than anticipated.
• C) the decrease in AD could have been completely unanticipated.
• D) the decrease in AD could have been any of the above.

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Definitions:

Budgeting Process

Involves estimating revenues and expenditures for a specific period to manage financial resources effectively.

Delaying Sales

The strategy of postponing selling activities or transactions to a future date to potentially achieve more favorable terms or prices.

Accelerating Expenses

Expenses that increase at a faster rate than usual, often leading to financial pressure on a business or project.

Economies of Scale

Businesses achieve cost benefits as a result of their operational size, where the cost for each produced unit diminishes as the size of operation expands.