When Aggregate Demand Increases,what Happens to Prices and Employment

question 73

Multiple Choice

When aggregate demand increases,what happens to prices and employment?

• A) Prices will fall and unemployment will rise.
• B) Prices and unemployment fall.
• C) Prices and unemployment rise.
• D) Prices will rise and unemployment will fall.

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Definitions:

Production Possibility Frontier

An illustration indicating the top production capabilities for a pair of items, given certain inputs like resources.

Productivity

A measure of the efficiency of production, often quantified as the ratio of outputs to inputs in the production process.

Capital Stock

Capital Stock represents the total physical or financial assets that a company utilizes for production, including buildings, machinery, and equipment.

Production Possibility Frontier

An illustration representing the peak production capabilities of two items, based on available resources.