If aggregate demand decreases, and as a result, real output and employment decline but the price level remains unchanged, it is most likely that:
A. the money supply has declined.
B. the price level is inflexible downward and a recession has occurred.
C. cost-push inflation has occurred.
D. productivity has declined.
B. the price level is inflexible downward and a recession has occurred.
You might also like to view...
The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot Pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price per pillow is
A) $70. B) $60. C) $40. D) $100. E) $30.
Which of the following is part of M2?
A) checks B) credit cards C) currency held inside a bank D) none of these are part of M1 or M2
The price elasticity of demand is calculated as:
A) the change in price divided by the change in quantity demanded. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the percentage change in quantity demanded divided by the percentage change in price.
Jim transfers money from his money market account to his savings account. This action
a. reduced M1 and increases M2. b. increases M1 and reduces M2. c. has no effect on M1 or M2. d. increases M1 and M2.