-Use the Figure Above to Answer This Question

question 492

Multiple Choice

-Use the figure above to answer this question. Suppose the economy is operating at point a. A move to ________ could be explained by ________.

• A) point c; an increase in the use of credit cards
• B) point b; an increase in real GDP
• C) point b; an increase in the nominal interest rate
• D) point e; an increase in U.S. exports

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Definitions:

Price Ceilings

Government-imposed limits on how high a price can be charged for a product or service.

Market Equilibrium

The condition in which market supply equals market demand, such that prices become stable.

Increased Demand

Describes a situation where a larger number of consumers are willing and able to purchase a good or service at a given price, often leading to higher prices or a market shortage if supply does not increase correspondingly.

Price Ceiling

A legally established maximum price that can be charged for a good or service, preventing prices from reaching equilibrium levels.