If a Contractionary Gap Is Cured by Increasing Aggregate Demand

question 15

Multiple Choice

If a contractionary gap is cured by increasing aggregate demand,

• A)both c and e are correct
• B)both d and e are correct
• C)real wages fall because prices rise
• D)prices rise causing real wages to increase
• E)money wages decrease as prices decrease

Recognize the effects of input prices on the production costs and decision-making of firms.

Explain the concept of derived demand in the context of labor and capital markets.

Interpret the marginal revenue product (MRP) and its role in resource employment decisions.

Evaluate the impact of external factors, such as technological advancements and occupational trends, on labor demand.

---

Definitions:

Normal Kitchen Scene

A typical or standard visualization of a kitchen environment, often used in studies of perception and cognition to assess how people interpret everyday scenes.

Occurrences

Events or instances where a specific situation or condition takes place.

Letter "H"

The eighth letter of the English alphabet, characterized by a vertical line with two horizontal lines connecting to the top and middle.

Neisser's Research

Refers to the work of cognitive psychologist Ulric Neisser, who is known for his contributions to the study of perception, memory, and the concept of self.