The Figure Below Shows the Aggregate Demand and Supply Curves

question 28

Multiple Choice

The figure below shows the aggregate demand and supply curves for the U.S. The figure given below shows that from the beginning of period 1 to the end of period 2:

• A) real GDP decreased and then increased.
• B) real GDP increased and then decreased.
• C) real GDP fell from $10,000 to $6,000.
• D) real GDP rose from $6,000 to $10,000.
• E) the inflation rate fell from 4 percent to 1 percent.

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Definitions:

Contract Rate

The agreed-upon price or rate specified in a contract for services or goods, often locked in for the duration of the agreement.

Issue Price

The price at which securities, such as bonds or shares, are originally sold to the public or investors by the issuing entity.

Installment Note Payable

A debt instrument that requires a series of periodic payments to the lender over a specified period of time.

Interest Expense

The expenditure an entity incurs from borrowing funds during a certain period.