Figure 10-4 -Refer to Figure 10-4. What Happens in the Product Market

question 148

Multiple Choice

Figure 10-4
-Refer to Figure 10-4. What happens in the product market as a result of the increase in money demand?

• A) The aggregate demand curve shifts to the left.
• B) The aggregate demand curve shifts to the right.
• C) The short-run aggregate supply curve shifts to the left.
• D) The short-run aggregate supply curve shifts to the right.

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Definitions:

Increasing-Cost Industry

An industry in which the costs of production increase as the industry grows and decreases as it contracts.

Resource Prices

The costs associated with acquiring inputs used in the production process, such as labor, materials, and capital.

Industry Expands

The process of growth within a particular sector or industry, marked by increased production, innovation, and possibly the entrance of new firms.

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, representing the excess return over the firm's opportunity costs.