Figure 12-4 -Refer to Figure 12-4. Assume That the Economy Is Initially

question 86

Multiple Choice

Figure 12-4
-Refer to Figure 12-4. Assume that the economy is initially at Y₁. If economists advocate
Policies to promote economic growth, such as those which encourage investment and work effort, which of the following would occur?

• A) a shift to the left in the long-run aggregate supply (LRA
• S) and the short-run aggregate supply (SRA
• S) curves
• B) a decrease in aggregate demand
• C) a shift to the right in both SRAS and LRAS
• D) a shift to the right of SRAS and to the left of LRAS

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Definitions:

Incoming Cash

Money received by an organization, representing inflows from various sources like sales, investments, or loans.

Assets

Economic resources or valuable items owned by an individual or business, expected to generate positive economic value.

Expenses

Outflows or other uses of assets or incurring of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major operations.

Earning Revenue

The process of generating income from business activities over a period, typically from the sale of goods and services.