The Diagram Below Shows an AD/AS Model for a Hypothetical

question 9

Multiple Choice

The diagram below shows an AD/AS model for a hypothetical economy.The economy begins in long-run equilibrium at point A. FIGURE 24-3 Refer to Figure 24-3.A negative shock to the economy shifts the AD curve from to .The initial effect is

• A)a recessionary output gap of 100.
• B)a recessionary output gap of 300.
• C)a recessionary output gap of 550.
• D)an inflationary output gap of 200.
• E)an inflationary output gap of 100.

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Definitions:

Waiver Of Warranty Rights

An agreement to relinquish one's legal rights to hold a seller accountable for defects in goods or property.

Statute Of Limitations

is a law prescribing the time limit within which legal action must be commenced for alleged breaches of law or rights.

Parol Evidence Rule

A common law rule which states that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend to have the written agreement be the complete and final version of their agreement.

Express Warranty

An explicit promise made by a seller about the quality or functionality of a product or service, forming part of the contract.