If Prices and Wages Are Flexible, a Decrease in Aggregate

question 32

Multiple Choice

If prices and wages are flexible, a decrease in aggregate demand will in the long run cause only a(n) :

• A) Decrease in the price level
• B) Increase in the price level
• C) Increase in the unemployment rate
• D) Decrease in real output

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Definitions:

Immigration

Choosing to live indefinitely in a country that is not your country of origin.

Endocrine System

The system of the body consisting of ductless glands.

Neurotransmitters

Chemical messengers that transmit signals across a chemical synapse from one neuron (nerve cell) to another target neuron.

Nervous System

The complex network of nerves and cells that transmit signals between different parts of the body, enabling communication between the brain and the body.