Use the Following to Answer Questions

question 151

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 that there is an increase in government purchases. In the short-run,

• A) the price level rises to P_b and real GDP increases to Y_b.
• B) the price level rises to P_d.
• C) the aggregate supply curve shifts up to SRAS₂.
• D) the economy's potential output increases to Y_b.

Comprehend the concept of net cash inflows and their importance in capital budgeting decisions.

Grasp the concept of amortization period in investment decisions.

Understand the process of net present value analysis and its implications for capital investment.

Recognize qualitative factors influencing capital investment decisions.

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