Exhibit 14-2 Aggregate Demand and Supply

question 37

Multiple Choice

Exhibit 14-2 Aggregate demand and supply

-In Exhibit 14-2,if aggregate demand shifts from AD₅ to AD₄,real GDP will:

• A)not change and the price level will fall from 170 to 100.
• B)not change and the price level will fall from 140 to 100.
• C)fall from $8 to $6 and the price level will not change.
• D)fall from $8 to $6 and the price level will fall from 140 to 120.
• E)not change and the price level will fall from 170 to 140.

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Definitions:

Microwave Ovens

Electrical appliances used to cook or heat food by utilizing microwave radiation.

Manufacturing Cost

The total expenses incurred in the process of producing goods, including the cost of materials, labor, and overhead.

Supply

Supply is the total quantity of a good or service that is available for sale at a given price over a specified time period.

Price

The expense value envisioned, mandated, or spent in return for something.