Using the AD-AS Model, If Consumers and Business Become More

question 83

Multiple Choice

Using the AD-AS model, if consumers and business become more optimistic about the future direction of the economy and increase spending, then:

• A) aggregate demand will decrease.
• B) aggregate demand will increase.
• C) long-run aggregate supply will increase.
• D) long-run aggregate supply will decrease.

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Definitions:

Pension Expense

The cost recognized in an accounting period related to an entity's pension plan, which includes service cost, interest cost, expected return on plan assets, and any amortization.

Straight-Line Method

An accounting method of depreciation in which an asset's cost is evenly spread over its useful life.

Actuaries

Professionals skilled in assessing the financial impact of risk and uncertainty, utilizing mathematics, statistics, and financial theory to study uncertain future events, especially in the insurance and finance industries.

Unrecognized Net Loss

Refers to losses that have occurred but have not been reported in the financial statements.