With reference to aggregate demand and aggregate supply, when output rises what would be expected to happen to employment?
A) Employment would rise.
B) Employment would fall.
C) Employment would remain constant.
D) Employment would first rise, and then fall.

Question

With reference to aggregate demand and aggregate supply, when output rises what would be expected to happen to employment?  
A) Employment would rise. 
B) Employment would fall. 
C) Employment would remain constant. 
D) Employment would first rise, and then fall.

Quizplus · Accepted Answer

When output rises, firms tend to hire more workers to meet the increased demand for goods and services, leading to a rise in employment. Therefore, employment is expected to rise when output increases.

With Reference to Aggregate Demand and Aggregate Supply, When Output