The Figure Given Below Represents the Equilibrium Real GDP and Price

question 69

Multiple Choice

The figure given below represents the equilibrium real GDP and price level in the aggregate demand and aggregate supply model.
Figure 8.3

-Refer to Figure 8.3. Movement from point B to point D could be initiated by:

• A) a stock market crash that undermines consumer confidence.
• B) a tax code changes that improve investor expectations.
• C) a national emergency that increases government spending.
• D) a higher net exports because of economic expansion in European countries.
• E) a technological advancement.

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Definitions:

Government Incentive

A policy or measure implemented by the government to encourage or discourage specific economic activities.

Free Trade

An economic policy allowing imports and exports to occur without government intervention such as tariffs, quotas, or other restrictions.

Sugar

A sweet-flavored substance sourced primarily from sugarcane and sugar beets, used widely as a sweetener in food and beverages.

Government Interference

Actions taken by the government to influence the economy or specific industries, which can include regulations, taxes, or subsidies.