When the Aggregate Demand Curve Shifts

question 2

Multiple Choice

When the aggregate demand curve shifts,

• A) the inflation rate does not change.
• B) there is a change in the natural unemployment rate.
• C) there is a movement along the short-run Phillips curve.
• D) there is a change in potential GDP.
• E) the short-run Phillips curve shifts.

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Definitions:

Net Purchases

The total amount of purchases made by a business after subtracting returns, allowances, and discounts.

Net Purchases

Net Purchases refers to the total amount of purchases made by a company after subtracting any returns, allowances, and discounts received.

Ending Inventory

is the total value of goods available for sale at the end of an accounting period after accounting for all additions and subtractions during the period.

Operating Expenses

Expenses incurred during the normal functioning of a business, excluding the cost of goods sold; these can include salaries, rent, utilities, and marketing expenses.