Suppose the Economy Is Initially Operating at Point a in the Above

question 226

Multiple Choice

Suppose the economy is initially operating at point A in the above figure. Which of the following statements is TRUE?

• A) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the long run.
• B) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the short run.
• C) An unexpected reduction in aggregate demand will cause the economy to move from point A to point C in the short run.
• D) none of the above

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Definitions:

Peer Appraiser

An employee designated to assess and review the performance of their colleagues as part of a company's evaluation system.

Management by Objectives

A strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed upon by both management and employees.

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Fundamental skills, knowledge, and abilities that are essential for an organization or individual to stand out in their field.

Business Strategy

A plan of action designed to achieve a long-term or overall aim in the business context.