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

question 17

Multiple Choice

The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. FIGURE 24-7
-Refer to Figure 24-7.If the government takes no action to close the existing output gap,then

• A)the AD curve will shift down until it intersects with the AS curve at point D.
• B)the AD curve will shift up until it intersects with the AS curve at point B.
• C)the AS curve will shift to the left until it intersects with the AD curve at point C.
• D)the AS curve will shift to the right until it intersects with the AD curve at point E.
• E)the AS curve can either shift to the right or left depending on the fiscal policy.

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Definitions:

Farm Products

Goods that are produced through agriculture, such as crops, livestock, and the products derived from them.

Documents of Title

Legal documents that provide proof of a person's rights to control the disposition of goods or property, such as bills of lading or warehouse receipts.

Identity

Identity refers to the qualities, beliefs, personality, looks, and/or expressions that make a person (self-identity) or group (particular social category or social group) distinct.

Leader

An individual who guides or directs a group, often by inspiring or influencing others toward a common goal.