Figure 10-18 -Beginning from a Point of Short-Run Equilibrium at Point E₂

question 72

Multiple Choice

Figure 10-18

-Beginning from a point of short-run equilibrium at point E₂ in Figure 10-18,the economy's movement to a new position of long-run equilibrium from that point would best be described as

• A)a movement along the AD₂ curve with a shift in the SRAS₁ curve to SRAS₂.
• B)a movement along the SRAS₂ curve with a shift in the AD₂ curve.
• C)a shift in the LRAS curve to an intersection at E₃.
• D)no shift of any kind.

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Definitions:

Revenue Account

An account that records the income earned by a company from its business activities.

Debit

A bookkeeping record that raises the value of an asset or expense, or reduces the value of a liability or equity.

Expense Account

An account used to record expenditures incurred by a company, relating to its operational activities.

Supplies

Items used in the day-to-day operations of a business, typically consumable in nature, such as office supplies, cleaning materials, and manufacturing components.