Use the Following to Answer Questions

question 200

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures Curve
Figure 13-6
-(Exhibit: Aggregate Expenditures Curve) Suppose government purchases rise by $100. In the aggregate demand/aggregate supply model,

• A) the aggregate demand curve shifts to the right by $100 at any given price level.
• B) the aggregate demand curve shifts to the right by ($100 * the multiplier) at any given price level.
• C) there is a downward movement along the aggregate demand curve such that real GDP demanded increases by $100.
• D) there is a downward movement along the aggregate demand curve such that real GDP demanded increases by ($100 * the multiplier).

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Definitions:

Transfer Price

The price charged for goods or services transferred between departments or divisions of the same company.

Variable Cost

Costs that vary directly with the level of production or sales volume, increasing as business activity rises and decreasing as it falls.

Transfer Price

The price at which goods or services are sold between divisions within the same company.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.