Economics 9708 · AS & A Level · Price stability and inflation

Price stability and inflation — practice question

What assumption is made in the explanation of cyclical unemployment?

  • AEmployers employ more labour if aggregate demand decreases.
  • BExchange rates ensure the value of imports is always equal to the value of exports.
  • CInterest rates make planned investment equal to planned savings.
  • DMoney wages are inflexible in a downward direction.

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