In the Short Run, a Decline in Aggregate Demand Would

question 54

Multiple Choice

In the short run, a decline in aggregate demand would be associated with:

• A)an inward shift of the Phillips curve.
• B)an outward shift of the Phillips curve.
• C)a movement up along the Phillips curve.
• D)a movement down along the Phillips curve.
• E)no change along the Phillips curve.

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares, effectively reducing the price of an individual share for investors while keeping the overall market capitalization the same.

Value-Weighted Index

An stock index in which each component is weighted according to its market value.

Price-Weighted Index

A stock market index in which each company's stock is included in proportion to its share price, meaning higher-priced stocks have more influence on the index's performance.

Stocks

Financial instruments that represent an ownership share in a corporation, entitling the holder to a proportion of the company's assets and profits, usually traded on stock exchanges.