Refer to the Diagram for a Specific Economy

question 74

Multiple Choice

Refer to the diagram for a specific economy. The shape of this curve suggests that

• A) the price level rises at a diminishing rate as the level of aggregate demand increases.
• B) full employment and price stability are compatible goals only when aggregate demand is falling.
• C) each successive unit of decline in the unemployment rate is accompanied by a smaller increase in the rate of inflation.
• D) each successive unit of decline in the unemployment rate is accompanied by a larger increase in the rate of inflation.

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Definitions:

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Subsidiary Corporation

A corporation wholly owned by another corporation (the parent corporation).

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Consolidation

The process of combining assets, liabilities, and other financial items of two or more entities into one.