When Aggregate Demand Declines, Some Firms May Reduce Employment Rather

question 43

Multiple Choice

When aggregate demand declines, some firms may reduce employment rather than wages because wage reductions may

• A)not be possible due to the minimum wage law.
• B)increase the cost of raising money capital.
• C)reduce the demands for their products.
• D)set off a price war.

---

Definitions:

High School

An educational institution that provides secondary education to adolescents, typically between the ages of 14 and 18.

Mediocre

Of only moderate quality; not very good.

Identity Statuses

Concepts in psychology that describe the process in which individuals explore and commit to various aspects of their personal and social identity.

Foreclosure

A legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.