Use the Following to Answer Questions

question 15

Multiple Choice

Use the following to answer questions .
Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1
-(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1) Suppose the economy is initially at point A. Now suppose an increase in government purchases shifts the aggregate demand curve to AD₂. What happens in the new short run?

• A) Firms increase output because product prices rise while real wage falls.
• B) Firms increase output because product prices and real wage rise.
• C) Firms will have to pay higher nominal wages and employ more workers to supply the increased output.
• D) The price level increases to P_b, real wages, nominal wages, and employment increase.

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Definitions:

Cardiovascular Disease

A general term for conditions affecting the heart or blood vessels, often related to atheroma or plaque build-up in the arteries.

Metabolic Equivalents

Units used to estimate the amount of energy expended during physical activity, compared to resting metabolic rate.

Typical Angina

Chest pain or discomfort, often described as pressure, squeezing, or fullness, caused by reduced blood flow to the heart, typically triggered by physical exertion or emotional stress.

Baseline EKG

An initial electrocardiogram used to measure the heart's electrical activity, serving as a reference for comparison with future EKGs.