Using the AD-AS Model, If Consumers and Business Become More

question 83

Multiple Choice

Using the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then:

• A) aggregate demand will decrease.
• B) aggregate demand will increase.
• C) long-run aggregate supply will increase.
• D) long-run aggregate supply will decrease.

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Definitions:

Temporal Interpretations

The understanding or analysis of events, narratives, and phenomena in the context of time, including their duration, sequence, and timing in relation to other events.

Anxiety Reduction

The process or methods employed to decrease feelings of worry, tension, or fear in individuals.

Death

The permanent cessation of all biological functions that sustain a living organism.

Restoration of Order

The process or goal of reestablishing social, political, or economic stability and peace following disruption, chaos, or conflict.