The ________ Impact of a Negative Aggregate Demand Shock Is

question 74

Multiple Choice

The ________ impact of a negative aggregate demand shock is ________ when the government does not target the deficit because targeting the deficit causes further negative aggregate demand shocks.

• A) adverse; reduced
• B) adverse; increased
• C) neutral; increased
• D) neutral; reduced

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Definitions:

Efficient Output

The level of production at which a company or economy can produce the maximum amount of goods and services with the least amount of input costs.

Cost Curves

Graphs in economics that show how the cost of producing a good or service varies with the quantity produced.

Total Costs

The sum of all expenses incurred by a business in producing goods or services, including both fixed and variable costs.

Profit Maximizing

The process or strategy employed by a firm to determine the price, output level, or operational scale that leads to the highest possible profit.