Use the Following to Answer Questions

question 144

Multiple Choice

Use the following to answer questions:
Figure: AD-AS Model II
-(Figure: AD-AS Model II) Refer to Figure: AD-AS Model II. When consumers and firms become more optimistic, in the short run the _____ curve will shift to the _____.

• A) SRAS; left
• B) SRAS; right
• C) AD; right
• D) AD; left

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Definitions:

Valuation Allowance

An allowance against deferred tax assets indicating that it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Trading Investments

Securities bought and held primarily for selling in the short term to profit from price differences.

Realized Gain

The profit made from selling an asset at a higher price than its purchase cost.

Fair Values

the estimated market value of an asset or liability, based on current prices in an open and competitive market.