The Concept of ________ Is Based on the Common-Sense Notion

question 102

Multiple Choice

The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today.

• A)present value
• B)future value
• C)interest
• D)deflation

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Definitions:

Aggregate Demand

Refers to the total amount of goods and services demanded in the economy at a given overall price level and in a given time period.

Short-Run Aggregate Supply Curve

Represents the relationship between the total supply of goods and services produced by an economy and the price level for those goods and services in the short run.

Potential Output

The maximum output an economy can produce without causing inflation when all resources are fully employed.

Aggregate Demand Curve

A curve that illustrates the total demand for all goods and services in an economy at various price levels, assuming all other factors remain constant.