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.

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Definitions:

User Costs

The expense incurred from using a good or service, including the cost of wear and tear, consumption of resources, and any loss of value or opportunity costs.

Extraction Quantity

The amount of natural resources, such as minerals, oil, or gas, that is removed from the Earth at a given time.

Present Value

The present value of a future amount of money or series of cash flows, calculated using a particular rate of return.

Future Value

The value of an asset or amount of money at a specific date in the future, adjusted for factors like interest or inflation.