The Diagram Below Shows an AD/AS Model for a Hypothetical

question 29

Multiple Choice

The diagram below shows an AD/AS model for a hypothetical economy.The economy begins in long-run equilibrium at point A.
FIGURE 24-3
-Refer to Figure 24-3. Following the negative AD shock shown in the diagram (from AD1 to AD2) , the adjustment process will take the economy to a long-run equilibrium where the price level is ________ and real GDP is ________.

• A)110; 1000
• B)60; 1000
• C)90; 900
• D)110; 800
• E)90; 1250

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Definitions:

Validity

Validity refers to the extent to which a concept, conclusion or measurement is well-founded and likely corresponds accurately to the real world.

Witnesses

Individuals who have seen an event, especially a crime or a test, and can provide a first-hand account or testimony.

Revocable Living Trust

A trust document created by an individual that can be amended or revoked during their lifetime, used often for estate planning purposes.

Estate Tax

Estate tax is a tax levied on the net value of the estate of a deceased person before it is distributed to the heirs.