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An Example of an Aggregate Demand Externality Is

Question 36

Multiple Choice

An example of an aggregate demand externality is


A) the costs that aggregate demand changes impose on third parties.
B) as long as total nominal demand is fixed, the economy as a whole benefits more by one firm's reduction in price than that one firm does.
C) as long as total nominal demand is fixed, the economy as a whole is adversely affected by one form's reduction in price than that one firm is.
D) the pollution caused by a chemical factory that is not captured in the costs of the chemicals.

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