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Suppose Nominal Aggregate Demand Falls by 3 Percent While Nominal

Question 133

Multiple Choice

Suppose nominal aggregate demand falls by 3 percent while nominal wages are fixed.If firms were to lower their prices by 3 percent,this would ________ the drop in real output,with such pricing ________ an assumption that firms are profit-maximizers.


A) prevent,in violation of
B) prevent,consistent with
C) worsen,in violation of
D) worsen,consistent with

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