Exhibit 14A-1 Aggregate Demand and Supply Model

question 91

Multiple Choice

Exhibit 14A-1 Aggregate demand and supply model

Based on Exhibit 14A-1, when the aggregate demand curve shifts to the position AD₂ and the economy is operating at point E₂, the economy's position of long-run equilibrium corresponds to point:

• A) E ₁ .
• B) E ₂ .
• C) E ₃ .
• D) E ₁ or E ₃ .

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Definitions:

Raw Materials

The fundamental materials used in the production process, which are transformed into finished goods.

Inventory Balance

The quantity of goods or materials on hand at a given time, representing the difference between inventory received and inventory sold or used.

Direct Labor Cost

The cost of wages and benefits for employees who are directly involved in the production of goods.

Product WZ

A specific product referenced by its name or model identifier "WZ," indicating a particular good produced by a company.