The Figure Given Below Depicts Long Run Equilibrium in an Aggregate

question 60

Multiple Choice

The figure given below depicts long run equilibrium in an aggregate demand-aggregate supply model.The change in real GDP in this figure from Y1 to Y2 could have been caused by:

• A)a government policy aimed at increasing demand.
• B)a change in weather conditions that led to worldwide crop failures.
• C)an attempt by key resource producers to monopolize supply.
• D)an increase in taxation or a decrease in government spending.
• E)an increase in labor productivity.

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Definitions:

Net Cash

The amount of cash available after accounting for cash inflows and outflows.

Net Income

The total revenue minus total expenses, indicating the profit earned by a business during a specific period.

Operating Activities

Activities related to the primary operations of a business, such as sales, supply chain management, and customer service.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to convert it from accrual to cash basis.