Use the Following Graph to Answer the Following Questions

question 97

Multiple Choice

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased,with no change in short-run aggregate supply (SRAS) .

-During the Great Recession,real gross domestic product (GDP) decreased,yet the aggregate price level remained largely unchanged,as depicted in the graph.Unemployment increased to above-normal levels.Which of following best explains why this happened?

• A) A significant decline in military spending following the end of a war led to a recession.
• B) A sharp recession followed the United States abandoning the gold standard.
• C) A decline in housing prices and stock prices,plus a financial crisis,caused a recession.
• D) A sudden increase in oil prices caused inflation and a deep recession.
• E) A stock market crash,large numbers of bank failures,an increase in tax rates,and a tight money supply caused a recession.

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Definitions:

Dealer Networks

Systems of authorized sellers that distribute and service products for manufacturers, often providing localized customer access to products and support.

Chrysler

An American automotive brand and subsidiary of Stellantis, known for producing vehicles such as cars, minivans, and sport utility vehicles.

Logistical Function

Involves the planning, implementation, and control of the efficient flow and storage of goods, services, and related information from point of origin to point of consumption to meet customer requirements.

Channel Intermediaries

Middlemen or agents between the producer and the consumer, facilitating the distribution of products or services through various channels.