FIGURE 24-1 Refer to Figure 24-1

question 139

Multiple Choice

FIGURE 24-1 Refer to Figure 24-1.If the economy is currently producing output of Y₀ and the government initiates an expansionary fiscal policy adequate to close the output gap,the result is intended to be

• A)the vertical line at Y^* will shift to the left,intersecting the AS and AD curves at Y₀.
• B)no change in either price level or output,since expansionary fiscal policy is ineffective.
• C)that the AS curve will shift to the right until point A is reached.
• D)that the AS curve and the AD curve will shift left simultaneously.
• E)that the AD curve will shift to the right until point B is reached.

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Definitions:

Accounts Receivable

Outstanding payments from customers to a firm for received goods or services that remain unpaid.

Financial Plan

A comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values, and withdrawal plans.

Shareholder Wealth

The total value of an individual's ownership stake in a publicly traded corporation, often measured in terms of stock price appreciation plus dividends received.

Sustainable Growth Rate

The highest speed at which a firm can increase its revenue, profits, and dividends without raising its financial borrowing.