Use the Following to Answer Questions

question 14

Multiple Choice

Use the following to answer questions .
Exhibit: Economic Growth, AD and AS Analysis
-(Exhibit: Economic Growth, AD and AS Analysis) Assume that the economy is initially in long-run equilibrium. What happens if investment spending increases?

• A) The short-run aggregate supply curve shifts right and the price level decreases.
• B) The long-run aggregate supply curve shifts right and the price level decreases.
• C) The long-run aggregate supply curve and the short-run aggregate supply curve shift right and the price level decreases.
• D) The aggregate demand curve shifts right and the price level increases.

---

Definitions:

Compounded Quarterly

The calculation of interest on the principal amount and previously earned interest on a quarterly basis.

Annuities

Financial products that provide a stream of payments over time in exchange for an initial lump sum investment.

Periodic Interest Rate

The interest rate charged or paid over a specific period of time, often less than one year, such as a month or quarter.

Annuity

A monetary scheme providing regular payment intervals to a person, often employed as a retirement income solution.