(Figure: Determining Long-Run and Short-Run Economic Shifts) Starting at Point

question 74

Multiple Choice

(Figure: Determining Long-Run and Short-Run Economic Shifts) Starting at point J, the economy will move to point _____ in the long run if policymakers reduce aggregate demand.

• A) m
• B) k
• C) r
• D) n

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Definitions:

Marginal Social Benefit

The additional benefit to society resulting from one more unit of a good or service being produced and consumed.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good or service, including both external and private costs.

Coal Mine Pollution

Environmental contamination resulting from the operation of coal mines, including air and water pollution.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good, including both private costs and any external costs.