-Refer to Figure 15-10

question 150

Multiple Choice

-Refer to Figure 15-10.Suppose that output in the economy is currently below full employment.If real GDP is $6.8 trillion and a demand shock lowers real GDP to $6.5 trillion,what would we expect to occur in the long run?

• A) The aggregate supply curve will shift upward as wages fall.
• B) The aggregate supply curve will shift downward as wages fall.
• C) The aggregate demand curve will shift rightward as wages fall.
• D) The aggregate demand curve will shift leftward as wages fall.
• E) No further changes in aggregate supply or aggregate demand without government intervention.

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Definitions:

Prefabricated Garages

Garages that are manufactured in sections off-site and then assembled on-site, providing a quick and often cost-effective building solution.

Sales Schedule

A detailed plan that outlines the expected timing and quantity of sales of a product or service.

Price Makers

Firms that possess the power to set the price of a good or service because of a lack of competition or the unique nature of the product.

Purely Competitive

A market structure characterized by a large number of small firms, free entry and exit, homogeneity of products, and perfect information that leads to the price being dictated by the market.