-In the Above Figure, If Aggregate Demand Does Not Change

question 88

Multiple Choice

-In the above figure, if aggregate demand does not change the short -run equilibrium will

• A) will not adjust on its own.
• B) eventually adjust to a long-run equilibrium with a higher price level.
• C) eventually adjust to a long-run equilibrium with a lower price level.
• D) None of the above answers are correct.

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Definitions:

Bond

A fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate.

Payment

The transfer of money or goods in exchange for the provision of services, the fulfillment of an obligation, or the purchase of goods.

Interest Rate

The fee, represented as a percentage, charged for the privilege of borrowing money, typically assessed annually on the loan principal.

Bank Account

A financial account maintained by a bank for a customer, allowing the deposit and withdrawal of money and the accrual of interest.