When the Aggregate Demand Curve Shifts to the Right,intersecting the Aggregate

question 122

Multiple Choice

When the aggregate demand curve shifts to the right,intersecting the aggregate supply curve on its upward-sloping or vertical segment,

• A) demand-pull inflation occurs.
• B) cost-push inflation occurs.
• C) stagflation occurs.
• D) deflation occurs.
• E) the shift pulls the price level down.

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Definitions:

Tariff Revenue

Income generated by a government from imposing tariffs on imported goods.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from producing and consuming a good or service.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Producer Surplus

The gap between the price producers are ready to take for offering a product or service and the actual payment they receive.