From the Perspective of Classical Macroeconomic Theory, If Aggregate Spending

question 122

Multiple Choice

From the perspective of classical macroeconomic theory, if aggregate spending was temporarily less than output:

• A) Product price would increase, but resource prices would decrease
• B) Product price would decrease, but resource prices would increase
• C) Product and resource prices would decrease, so that aggregate spending would rise, expanding output
• D) Product and resource prices would increase, so that aggregate spending would equal output

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Definitions:

Tangible Assets

Physical items or properties owned by a person or company, such as real estate, equipment, and inventory.

Percent

A mathematical term that represents a fraction of 100, used to describe proportions or comparisons between quantities.

Financial Assets

Assets that derive their value from contractual claims, such as stocks, bonds, bank deposits, and other investments.

Bonds

Debt securities issued by entities (governments or corporations) to raise capital, promising to pay back with interest at a specified date.