Suppose the Full-Employment Level of Real Output (Q) for a Hypothetical

question 5

Multiple Choice

Suppose the full-employment level of real output (Q) for a hypothetical economy is $500 and that the price level (P) initially is 100.Use the following short-run aggregate supply schedules to answer the next question. Refer to the information above.In the long run, an increase in the price level from 100 to 125 will:

• A)increase real output from $500 to $560.
• B)decrease real output from $500 to $440.
• C)change the aggregate supply schedule from (a) to (c) and result in an equilibrium level of real output of $560.
• D)change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500.

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Definitions:

Common Shares

Equity securities that represent ownership interests in a corporation, providing voting rights and potential dividends to shareholders.

Preferred Shares

A class of ownership in a corporation with a fixed dividend, that has priority over common shares in the distribution of dividends and assets.

SEC Requires

Mandatory rules and requirements established by the Securities and Exchange Commission that publicly traded companies must follow to protect investors and ensure the integrity of the securities markets.

Common Stock

Common stock represents units of ownership interest or equity in a corporation, where holders usually have voting rights to elect the board of directors.