Refer to the Above Diagrams

question 74

Multiple Choice

Refer to the above diagrams.A decline in aggregate expenditures from AE₂ to AE₁resulting from the wealth, interest rate, and foreign trade effects would be depicted as:

• A)a movement from A to B along aggregate demand curve AD₁.
• B)a movement from C to A along aggregate demand curve AD₁.
• C)a shift of aggregate demand from AD₁ to AD₂.
• D)a shift of aggregate demand from AD₂ to AD₁.

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Definitions:

Fiscal Year

A one-year period used for financial reporting and budgeting, which does not necessarily coincide with the calendar year.

Business Activities

Various operations, tasks, and functions carried out by a company in pursuit of its economic goals.

Drawing

The account used to record amounts withdrawn by an owner of a proprietorship.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, clearing out revenues and expenses for the next period.