Which of the Following Would Be the Theoretical Outcome of Expansionary

question 13

Multiple Choice

Which of the following would be the theoretical outcome of expansionary fiscal policy in the following aggregate demand-aggregate supply model?

• A) The aggregate demand (A
• D) curve would shift from AD₁ to AD₂.
• B) The short-run aggregate supply (SRA
• S) curve would shift from SRAS₂ to SRAS₁.
• C) The short-run aggregate supply (SRA
• S) curve would shift from SRAS₁ to SRAS₂.
• D) The aggregate demand (A
• D) curve would shift from AD₁ to AD₂ at the same time that the SRAS curve would shift from SRAS₁ to SRAS₂.
• E) The aggregate demand (A
• D) curve would shift from AD₂ to AD₁.

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Definitions:

Bulk Transfer

The transfer of a substantial part of the materials, inventory, or supplies of a business outside the ordinary course of business.

Ordinary Course of Business

The regular, usual, and customary activities and operations that a company engages in to conduct its business.

Consignment

The process of handing over goods to another party to sell on behalf of the owner, yet ownership remains with the original party until the goods are sold.

Personal Property

Movable items owned by an individual or corporation, as opposed to real property like land or buildings.