The Figure Below Shows Equilibrium in an Aggregate Demand-Aggregate Supply

question 2

Multiple Choice

The figure below shows equilibrium in an aggregate demand-aggregate supply model. In this figure, the shift from AS to AS' is likely to occur when:

• A) the actual price level is higher than expected.
• B) the actual price level is lower than expected.
• C) the unemployment rate is lower than the natural rate.
• D) the actual output is more than the potential output.
• E) the aggregate demand curve intersects the short-run aggregate supply curve at the potential output.

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Definitions:

Gross Sales

The total revenue generated from the sale of goods or services before any deductions are made for returns, allowances, or discounts.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, known for its large-scale operations and economic impact.

Exxon

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Dependency Theory

An economic theory suggesting that developing nations are dependent on developed nations and this dependency inhibits their growth and development.