The U.S. Aggregate Demand Curve Shifts Leftward If

question 8

Multiple Choice

The U.S. aggregate demand curve shifts leftward if

• A) the economic conditions in Europe improve so that European incomes increase.
• B) there is a tax cut.
• C) the Federal Reserve increases the interest rate.
• D) the exchange rate falls.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore should not factor into future decisions.

Decision Making

Selecting a course of action from competing alternatives.

Differential Cost Analysis

The process of comparing the cost differences between two business decisions in order to determine which is more financially viable.

Traceable

Refers to costs or expenses directly associated with a specific department, product, or project, making it easy to assign them accurately.