Figure 10.3 Panel (A) Panel (B)

question 92

Multiple Choice

Figure 10.3

Panel (a) Panel (b)
-Refer to Figure 10.3..A negative demand shock accompanied by an increase in the real interest rate is best represented by ________ in panel (a) and ________ in panel (b) .

• A) a shift from AE₃ to AE₂; a movement from point C to point B
• B) a shift from AE₂ to AE₃; a shift from IS₁ to IS₂
• C) a shift from AE₂ to AE₁; a movement from point B to point A
• D) a shift from AE₃ to AE₁; a movement from point C to point A

---

Definitions:

Cash Payment

The process of settling a debt or completing a purchase with the exchange of physical money or through electronic funds.

Interest

The cost of borrowing money or the earnings from lending money, typically expressed as a percentage of the principal.