The Intersection of the Economy's Aggregate Demand and Long-Run Aggregate

question 96

Multiple Choice

The intersection of the economy's aggregate demand and long-run aggregate supply curves
I. determines its equilibrium real GDP in both the long run and the short run.
II. determines its equilibrium price level in both the long run and the short run.
III. occurs at the economy's potential output.

• A) I, II, and III
• B) I and III only
• C) II and III only
• D) III only

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Definitions:

Dividends in Arrears

Unpaid dividends on preferred stock, which must be paid out before any dividends can be distributed to common stockholders.

Dividend Declaration

The action by a company's board of directors to set the amount and date of a dividend payment to shareholders.

Noncumulative

Pertaining to dividends or preferred stock where undeclared or unpaid dividends do not accumulate and are not owed in future periods.

Common Stockholders

Individuals or entities that own shares of a company's common stock, granting them voting rights and a share of the company's profits through dividends.