FIGURE 29-3 Refer to Figure 29-3

question 58

Multiple Choice

FIGURE 29-3 Refer to Figure 29-3.The movement of the economy from E₀ to E₁ was likely caused by

• A)a positive demand shock due to an increase in investment.
• B)a positive supply shock caused by improved productivity.
• C)a negative demand shock caused by fall in consumption.
• D)a negative supply shock caused by higher input prices.
• E)an increase in the price level.

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Definitions:

Retained Earnings

The part of the net earnings kept by the company instead of being paid out to shareholders as dividends.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders the right to vote at shareholder meetings and receive dividends.

Retained Earnings

The cumulative amount of net income kept in the company to be reinvested in its core business or to pay debt, after paying dividends to shareholders.

Expenses

Expenses are the costs incurred in the process of generating revenue, and they can include items like rent, salaries, and utilities.