In a Diagram of Aggregate Demand and Supply Curves,the AD

question 21

Multiple Choice

In a diagram of aggregate demand and supply curves,the AD shortfall is measured as the

• A)Vertical distance between the equilibrium price and the price at which the aggregate demand would intersect aggregate supply at full employment.
• B)Horizontal distance between the equilibrium output and the full-employment output.
• C)Horizontal distance between the aggregate demand curve necessary for full employment and the aggregate demand curve that intersects AS at the equilibrium price.
• D)Vertical distance between the recessionary GDP gap and the inflationary GDP gap.

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Definitions:

Financial Statements

Reports that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Paid-In Capital

Funds raised by a company through the sale of its own shares.

Dividends In Arrears

Dividends on preferred stock that have not been paid by the declaration date but are still owed to shareholders.

Non-Cumulative

Pertaining to preferred stock, which does not accumulate unpaid dividends if they are not declared.