For the Following Questions, Use the Diagram Below

question 184

Multiple Choice

For the following questions, use the diagram below:
Figure 34-3

-Refer to Figure 34-3.Which of the following is correct?

• A)A wave of optimism could move the economy from a to B
• B)If aggregate demand moves from AD₁ to AD₂ the economy will stay at b in both the short and long run.
• C)It is possible that either fiscal or monetary policy might have caused the shift from AD₁ to AD₂.
• D)All of the above are correct.

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Definitions:

Foreign Wages

This refers to the rates of pay for workers in countries other than the home country, significant in discussions of outsourcing, labor markets, and international competitiveness.

U.S. Workers

Individuals working in the United States, encompassing all sectors and types of employment.

Tariff Revenues

The income generated by a government through the imposition of tariffs, which are taxes on imported goods.

Oil Imports

The purchase of crude oil or petroleum products from foreign countries, which is a significant factor for economies dependent on outside sources for their energy needs.