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

question 17

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.

---

Definitions:

Tax Purposes

Considerations or actions taken within financial contexts to optimize tax liability, including strategies for deductions, credits, and structuring transactions.

CCA Rate

Refers to the Capital Cost Allowance rate, which is used in taxation to represent the annual depreciation expense of a physical asset's cost.

NPV

Net Present Value, a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Salvage Value

The estimated resale value of an asset at the end of its useful life, accounting for depreciation.