Refer to the Figure Below

question 198

Multiple Choice

Refer to the figure below. In the above figure, AD₁ and AS₁ represent the original aggregate demand and aggregate supply curves, respectively.AD₂ and AS₂ show the new aggregate demand and supply curves.The changes in aggregate demand and aggregate supply result in a(n) :

• A)increase in the price level.
• B)increase in the real output and no change in the price level.
• C)increase in the real output and the price level.
• D)decline in the real output and no change in the price level.

---

Definitions:

NPV Distribution

Refers to the distribution of net present values across different potential investments or projects.

Conditional Probability

The probability of one event occurring with some relationship to one or more other events.

Real Option

A choice available to companies involving business decisions on investments, which use the concept of option valuation in financial markets.

Scenario Analysis

A process of analyzing future events by considering alternative possible outcomes (scenarios), often used in the assessment of risk or strategic planning.