If the Economy Is in Macroeconomic Equilibrium with a Vertical

question 75

Multiple Choice

If the economy is in macroeconomic equilibrium with a vertical AS curve,and then aggregate demand decreases,we expect the AE function to shift to a

• A)higher level and stay there.
• B)higher level,but then shift part of the way down to its original position as the price level falls.
• C)higher level but then return to its original position as the price level falls.
• D)lower level and stay there.
• E)lower level,but then return to its original position as the price level falls.

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Definitions:

Expenses

Costs incurred by a business in the process of earning revenue, often classified as operating or non-operating expenses.

Miscellaneous Expense

Small, often unpredictable expenditures that don't fit neatly into a designated budget category.

Post-Closing Trial Balance

A list of all the accounts and their balances after the closing entries are made, ensuring that debits equal credits in the ledger.

Dividends

Disbursements issued by a company to its shareholders, allocating a fraction of the company's profits.