Use the Following to Answer Questions

question 171

Multiple Choice

Use the following to answer questions:
Figure: Shifts of the AD-AS Curves
-(Figure: Shifts of the AD-AS Curves) Refer to Figure: Shifts of the AD-AS Curves. A short run decrease in investment spending is illustrated by panel:

• A) (a).
• B) (b).
• C) (c).
• D) (d).

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Definitions:

Short Run

A period of time in economics during which at least one input is fixed, limiting the immediate capacity of businesses to adjust to market changes.

Losses

Financial reductions resulting from the operation of a business, particularly when expenses exceed revenues.

Shut Down

In economics, shut down refers to a short-term decision by a firm to cease production because operating costs exceed the revenue generated, particularly when prices fall below variable costs.

Increasing-Cost Industry

An industry in which costs of production increase as output is increased, often due to factors like limited resources or higher input prices.