-In the Above Figure, Point a Represents

question 89

Multiple Choice

-In the above figure, point A represents

• A) an increase in aggregate demand.
• B) a recessionary gap.
• C) an inflationary gap.
• D) a full-employment equilibrium.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product that is homogenous across suppliers, leading to price competition and efficiency.

External Benefits

Benefits from a transaction or activity that accrue to others not directly involved in the transaction or activity.

External Costs

Costs generated by production or consumption activities that are not borne by the producer or consumer but by a third party or society at large.

Socially Desirable

Refers to actions or policies that are widely accepted and promoted by society because they are considered beneficial for the majority of its members.