Refer to the Diagram $A D _ { 1 }$ To $A D _ { 2 }$

question 133

Multiple Choice

Refer to the diagram. The real-business-cycle view of recession would best be described by

• A) a decrease of aggregate demand from \(A D _ { 1 }\) to \(A D _ { 2 }\), followed by a decrease in aggregate supply from \(\mathrm { AS } _\mathrm { LR 1} \) to \(\mathrm { AS } _\mathrm { LR 2} \).
• B) an increase in aggregate demand from \(A D _ { 1 }\) to \(A D _ { 2 }\), which in turn causes a decrease in aggregate supply from \(A S _ { \mathrm { LR } 1 }\) to \(A S _ { \mathrm { LR } 2 }\).
• C) a decrease in aggregate supply from \(\mathrm { AS } _ { \mathrm { LR } 1 }\) to \(\mathrm { AS } _\mathrm { LR2 }\), followed by a decrease in aggregate demand from \(A D _ { 1 }\) to \(A D _ { 2 }\).
• D) a decrease in aggregate supply from \(\mathrm { AS } _ { \mathrm { LR } 1 }\) to \(\mathrm { AS } _ { \mathrm { LR } 2 }\), followed by an increase in aggregate demand from \(A D _ { 2 }\) to \(A D _ { 1 }\).

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Definitions:

Economic Enterprises

Organizations or businesses engaged in commercial, industrial, or professional activities with the aim of generating profits.

Racial Wealth Gap

The significant disparity in median wealth between different racial and ethnic groups in a society, often resulting from historical inequities and systemic racism.

Racialized Institution

An institution that embeds racial practices and policies within its operations, thereby perpetuating racial inequalities and hierarchies.

Physical Attributes

The observable physical characteristics of an individual, including height, body shape, skin color, hair, and facial features.