The Leftward Shift of the AD Curve During 2007 Occurred

question 1

Multiple Choice

The leftward shift of the AD curve during 2007 occurred partly because of

• A)higher net exports.
• B)a balanced federal government budget.
• C)an increase in consumer confidence.
• D)a stock market crash.
• E)the Fed lowering interest rates.

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Definitions:

Minimum Efficient Scale

The smallest scale of production a firm can achieve while still taking full advantage of economies of scale in terms of costs per unit.

Output

The quantity of goods or services produced by a firm, sector, or economy within a certain period.

Overhead Costs

Expenses not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Newspaper Industry

Refers to the sector of the economy that is engaged in the production and distribution of newspapers, involving both print and, increasingly, digital platforms.