In the AD-AS Model,an Unexpected Decrease in the Growth Rate

question 157

Multiple Choice

In the AD-AS model,an unexpected decrease in the growth rate of the money supply causes:

• A) a rightward shift of the AD curve and then an upward shift of the SRAS curve.
• B) a rightward shift of the AD curve and then a downward shift of the SRAS curve.
• C) a leftward shift of the AD curve and then an upward shift of the SRAS curve.
• D) a leftward shift of the AD curve and then a downward shift of the SRAS curve.

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Definitions:

Holding Gains

Holding gains are the increased values of assets that a company holds, realized when the asset is sold or revalued.

FIFO Cost Flow

An inventory valuation method where the cost of the earliest goods purchased are the first to be recognized as cost of goods sold.

Net Income

This refers to the amount of money a company earns after subtracting all its expenses, taxes, and costs from its total revenue.

Ending Inventory Value

The total value of all the goods available for sale at the end of a financial period.