-Refer to Figure 15-9

question 78

Multiple Choice

-Refer to Figure 15-9.Suppose the economy is in equilibrium with real GDP of $7 trillion.A demand shock shifts the aggregate demand curve to AD₂,increasing real GDP to its full-employment level of $7.2 trillion.In the long run,following the shock,we would expect the

• A) aggregate demand curve to shift rightward,further increasing real GDP and the price level
• B) aggregate demand curve to shift leftward,returning real GDP to $7 trillion
• C) aggregate supply curve to shift downward,returning the price level to 120
• D) aggregate supply curve to shift upward,returning real GDP to $7 trillion
• E) economy to remain at the new level of output of $7.2 trillion.

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Definitions:

U.S. GAAP

United States Generally Accepted Accounting Principles, the collection of rules and procedures designed to ensure consistency and transparency in financial reporting.

Estimated Cost

A projection or approximation of the future cost associated with a product, service, project, or investment, often used for budgeting purposes.

Provision

A provision is an amount set aside in the financial statements to cover a future liability or loss.

Dollar Amount

A specific quantity of money expressed in the currency of the United States, represented by the dollar symbol ($).