-The Reason That It Is Possible for the Economy in the Above

question 62

Multiple Choice

-The reason that it is possible for the economy in the above figure to be at equilibrium point E₂ rather than at equilibrium point E₁ is that

• A) in the long run there is always less than full employment.
• B) in the short run the economy can produce more than it can in a long-run situation.
• C) AD always shifts rightward and never shifts leftward.
• D) the economy must be in a recession.

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Definitions:

Cash Balance

The amount of cash a company or an individual has available after all transactions have been accounted for.

Deposits

Sums of money placed into an account or with a financial institution for safekeeping and/or to earn interest.

Check Register

A logbook used by individuals to track checks issued, deposits made, and current balance in their checking account; a tool for personal financial management.

Cash Balance

The total amount of cash or cash equivalents available in a company’s account at any given time.