Refer to the Following Figure to Answer the Next

question 131

Multiple Choice

Refer to the following figure to answer the next questions.

-Based on the figure, if the economy is currently at point B because of a shift in aggregate demand, then in the long run, we can expect we will move to

• A) point C.
• B) point A.
• C) point D.
• D) point C and then point D.
• E) point A and then point C.

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Definitions:

Income Statement

A financial document that reports a company's revenues, expenses, and profit over a specified time period.

Cash Balance

The amount of cash a company has available at any given time, reflecting its liquidity.

Payroll

The total amount of wages, salaries, and other earnings that a business pays to its employees.

Liquidity Ratios

Financial ratios used to measure a firm’s ability to meet its short-term obligations to creditors as they come due.