An Increase in Aggregate Demand Is Beneficial in the Short

question 166

Multiple Choice

An increase in aggregate demand is beneficial in the short run because ________,but harmful in the long run because ________.

• A) output decreases; the unemployment rate falls
• B) the unemployment rate falls; the price level rises
• C) wages decrease; wages increase
• D) real wealth decreases; real wealth increases
• E) wages increase; the unemployment rate rises

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Definitions:

Unconscionability

A legal doctrine that describes terms so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are deemed contrary to good conscience.

Good Faith

Acting with honesty, fairness, and sincerity without any intent to deceive or defraud.

Commercial Practices

Business activities, methods, and policies that are engaged in by entities involved in the buying, selling, and providing of goods and services.

Common Law

A legal system based on custom, court rulings, and past legal precedents rather than statutory laws.