The Following Question Are Based on the Following Diagram, in Which

question 38

Multiple Choice

The following question are based on the following diagram, in which existing aggregate supply and demand curves are AS₀ and AD₀, respectively:

-As a result of these strategic input price increases,the price level

• A) rises to ₀P₂ and real output increases to ₀Q₂.
• B) increases to ₀P₃ and real output remains unchanged.
• C) remains unchanged and real output increases to ₀Q₃.
• D) remains unchanged and real output remains unchanged.
• E) rises to ₀P₁ and real output declines to ₀Q₁.

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Definitions:

Black Market

An illegal market where goods or services are traded without compliance with legal requirements, often including the sale of illicit goods.

Illegal Trading

Unlawful transactions of goods or services that may involve insider trading, market manipulation, or trading of illegal items.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.

Equilibrium Quantity

The quantity of goods or services supplied that equals the quantity demanded at the market equilibrium price.