Which of the Following Scenarios Could Result in a Recession

question 140

Multiple Choice

Which of the following scenarios could result in a recession?

• A) Aggregate demand decreases,and wages are flexible.
• B) Aggregate demand decreases,and wages are sticky.
• C) Aggregate demand increases,and wages are flexible.
• D) Aggregate demand increases,and wages are sticky.

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Definitions:

Marginal Cost

The additional cost incurred when producing one more unit of a good or service.

Economic Profit

The total revenue of a firm minus its explicit and implicit costs, representing the surplus generated beyond the opportunity cost.

Marginal Revenue

The increase in earnings from the sale of one additional unit of a good or service.

Competitive Price-Taker

An enterprise that is unable to dictate the market price and thus must conform to the current market price for its offerings.