On a Graph Showing the Aggregate Demand and Aggregate Supply

question 167

Multiple Choice

On a graph showing the aggregate demand and aggregate supply curves, stagflation can be represented by a(n) _____

• A) leftward shift of the aggregate supply curve.
• B) rightward shift of the aggregate supply curve.
• C) upward movement along the aggregate supply curve.
• D) rightward shift of the aggregate demand curve
• E) upward movement along the aggregate demand curve.

---

Definitions:

Excess Reserves

Funds that banks hold over and above the legal reserve requirement set by central banking authorities.

Government Bonds

Securities issued by a government to raise funds from the public to finance its expenditure needs.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability.

U.S. Treasury Department

A federal government department responsible for managing government revenue, issuing currency, and supervising national banks.