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Refer to the Diagram Given Below

question 17

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Refer to the diagram given below. Refer to the diagram given below.   If AD<sub>1</sub> shifts to AD<sub>2</sub>, then the equilibrium output and price level are: A) P<sub>1</sub> and Q<sub>3</sub>. B) P<sub>2</sub> and Q<sub>3</sub>. C) P<sub>1</sub> and Q<sub>2</sub>. D) P<sub>2</sub> and Q<sub>2</sub>. If AD1 shifts to AD2, then the equilibrium output and price level are:

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Definitions:

Tax Deductible

Expenses or payments that can be subtracted from gross income to reduce the amount of income subject to tax.

Bonds

Long-term securities issued by corporations, municipalities, or governments to raise funds, paying interest to holders.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specified time period.

Callable Bonds

Bonds that give the issuer the right but not the obligation to redeem the bonds before their maturity date, usually at a predefined call price.

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