If the Short-Run Aggregate Supply Curve Is Horizontal, And, If

question 73

Multiple Choice

If the short-run aggregate supply curve is horizontal, and, if each member of the general public chooses to hold a larger fraction of his or her income as cash balances, then:

• A) output and employment will increase in the short run.
• B) output and employment will decrease in the short run.
• C) prices will increase in the short run.
• D) prices will decrease in the short run.

---

Definitions:

Goodwill

The intangible asset representing the value of a business's reputation, customer relations, and brand identity that contributes to its profitability.

Usury Statutes

Laws regulating the maximum interest rates that can be charged on loans.

Real Estate Mortgages

A secured loan agreement where the borrower pledges real estate property as collateral for the loan, which the lender can seize if the loan isn't repaid.

Consumer Loans

Financial loans given to individual borrowers for personal, family, or household purposes, as opposed to business or commercial loans.