If the Economy Experiences Simultaneous Negative Aggregate Demand and Aggregate

question 46

Multiple Choice

If the economy experiences simultaneous negative aggregate demand and aggregate supply shocks,and the Fed decides to intervene with expansionary policy.Aggregate demand will eventually shift back to the right,which will eventually bring the economy

• A) back to potential GDP at a lower price level.
• B) back to potential GDP at a higher price level.
• C) back to the original equilibrium price at a lower level of aggregate output.
• D) back to the original equilibrium price at a higher level of aggregate output.

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Definitions:

Eligible Dividends

Dividends designated by a corporation to be eligible for a lower tax rate on the dividend income received by an individual shareholder.

Tax Paid

Refers to the total amount of taxes remitted to the relevant tax authorities for income, sales, property, or other forms of taxes.

Cash Flow

The total amount of money being transferred into and out of a business, representing its operating, investing, and financing activities.

Common Stock Repurchases

The act of a company buying back its own shares from the marketplace, which can reduce the number of outstanding shares and often increase the value of remaining shares.