Exhibit 20A-2 Macro AD/AS Models

question 68

Multiple Choice

Exhibit 20A-2 Macro AD/AS Models

In Panel (a) of Exhibit 20A-2, an expansionary Keynesian government stabilization policy designed to move the economy from Y₁ to Y_p would shift the:

• A) aggregate demand curve (A
• D)to the left.
• B) aggregate demand curve (A
• D) to the right.
• C) SRAS rightward.
• D) LRAS rightward.

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Definitions:

Transaction Costs

Expenses incurred when buying or selling goods or services, which may include fees, taxes, or other costs beyond the price of the product itself.

Wealth

The total value of all financial assets and tangible possessions owned by an individual or entity after deducting liabilities.

Ask

The lowest price a seller is willing to accept for a given asset in financial markets; also known as the offer price.

Market Maker

A firm or individual that actively quotes two-sided markets in a security, providing liquidity by making available buy and sell orders.