The Figure Below Reflects the Inverse Relationship Between Real GDP

question 72

Multiple Choice

The figure below reflects the inverse relationship between real GDP and the price level.If the economy is initially at point c and aggregate demand is stable,in the long run,the economy will:

• A)move toward point a
• B)move toward point b
• C)stay at point c
• D)move toward point d
• E)move toward point f

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Definitions:

Treasury Stock

Treasury stock refers to shares that were once in circulation but have been bought back by the issuing company and held in its own treasury.

Contra

A term used in accounting to describe accounts that have an opposite effect on the account they are related to, used to reduce the balance of the original account.

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the value that belongs to the company's owners.

Convertible Bonds

Bonds issued by a corporation that can be converted into a predetermined number of the company's stock shares at the bondholder's option.