Use the Following to Answer Questions

question 44

Multiple Choice

Use the following to answer questions :
Figure: Classical Versus Keynesian Macroeconomics
-(Figure: Classical Versus Keynesian Macroeconomics) Look at the figure Classical Versus Keynesian Macroeconomics. According to the classical view, if this economy shifts from AD₁ to AD₂, perhaps because of a large decline in investment spending by businesses, the price level will _____ and real GDP will _____.

• A)rise; fall
• B)not change; increase
• C)fall; not change
• D)fall; fall

---

Definitions:

Union Contracts

Legally binding agreements between employers and a body of employees represented by a union, detailing workers' salaries, benefits, and working conditions.

Currently Attainable Standards

Benchmarks or goals that can be achieved under current operating conditions and capabilities, used for measuring performance and improvement.

Production Difficulties

Challenges encountered during the manufacturing or production process that can lead to delays, increased costs, or reduced quality of the finished product.

Direct Labor Standard

A benchmark for the amount of labor directly involved in producing a unit of output, used for budgeting and measuring efficiency.