Use the Figure Below to Answer the Following Question

question 1

Multiple Choice

Use the figure below to answer the following question.

Figure 26.3.4
-Refer to Figure 26.3.4. The changes represented

• A)cannot occur because aggregate demand and short-run aggregate supply cannot change at the same time.
• B)lead to an inflationary gap.
• C)lead to a recessionary gap.
• D)cause a proportionate increase in long run aggregate supply.
• E)increase real GDP.

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Definitions:

Unproductive

Refers to resources or activities that do not contribute to the output or efficiency of a process or operation.

Fixed Costs

Costs that do not change in total with changes in the volume of production or sales, such as rent, salaries, and insurance.

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, especially in decision making or problem-solving.

Decision

The act of making a choice among various alternatives.