The Figure Below Shows the Short-Run Aggregate Demand and Supply

question 71

Multiple Choice

The figure below shows the short-run aggregate demand and supply curves of an economy. When real GDP is at Y₂, _____.

• A) potential output is greater than actual output.
• B) there is a recessionary gap.
• C) the price level is likely to fall.
• D) the actual unemployment rate is less than the natural rate of unemployment.
• E) aggregate demand is likely to increase to restore equilibrium.

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Definitions:

T Account

A T Account is a visual representation of a ledger account, typically used in accounting to track the debit and credit balances of an account.

Common Stock

Represents ownership shares in a corporation, giving holders voting rights and a residual claim on the company's assets and earnings.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, thus holding a portion of the company's equity.

Journal Entry

A record in the accounting books that notes all the financial transactions of a business.