(Figure: Aggregate Demand and Supply) the Above Graph Depicts an Economy

question 177

Multiple Choice

(Figure: Aggregate Demand and Supply) The above graph depicts an economy originally in equilibrium at point e. Assume that the government uses expansionary fiscal policy. The movement from point a to point b is due to:

• A) increased consumer spending brought about by increased government spending and/or lower taxes.
• B) workers and suppliers adjusting their expectations to lower price levels.
• C) workers and suppliers adjusting their expectations to higher price levels.
• D) decreased consumer spending brought about by increased government spending and/or lower taxes.

Calculate consumer's optimal choice given budget constraints and prices.

Identify and explain the impact of income and price changes on consumer's demand.

Define and interpret key concepts such as Engel curves, indifference curves, and budget lines.

Understand the nature of goods (normal, inferior, Giffen) through consumer's reactions to income changes.

---

Definitions:

Board Of Directors

A group of elected or appointed members who jointly oversee the activities of a company or organization.

Shareholder's Right

Legal entitlements and powers granted to shareholders of a company, such as voting on corporate matters and receiving dividends.

Bylaws

Regulations set by a corporation or other body to control its own actions and management.

Fiduciary Duties

Fiduciary duties refer to the obligations of loyalty and care that certain individuals, such as trustees or corporate officers, owe to those they serve.