A Negative Shock in Aggregate Demand Will Likely Result in ________

question 63

Multiple Choice

A negative shock in aggregate demand will likely result in ________.

• A)a short run decrease in output
• B)a permanently lower equilibrium inflation rate if the central bank does not respond by lowering interest rates
• C)an eventual increase in aggregate supply for any inflation rate if the central bank does not respond by lowering interest rates
• D)all of the above
• E)none of the above

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Definitions:

Dividend Yield

An economic indicator demonstrating the ratio of a company's annual dividends to its stock price.

Constant Rate

A fixed rate that does not change over the specified period of time.

Expected Return

The average of a probability distribution of all possible returns that an investment might generate.

Dividend Yield

A financial metric indicating the annual dividend payment of a company as a proportion of its share price.