If the Economy Is in Macroeconomic Equilibrium with a Vertical

question 73

Multiple Choice

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

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

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Definitions:

Taxes On Apples

Specific charges levied by governments on the sale of apples, affecting both the price and quantity sold.

Price Of Apples

The monetary amount charged for a pound or kilogram of apples, influenced by factors such as seasonality, demand, and production costs.

United States

A country located in North America, comprising 50 states and a federal district, known for its significant impact on global economics, politics, and culture.

Free Trade

The unrestricted buying and selling of goods and services between countries without the imposition of constraints such as tariffs, duties, and quotas.