-In the Figure Above,the Shift in the Aggregate Demand Curve

question 21

Multiple Choice

-In the figure above,the shift in the aggregate demand curve from AD₁ to AD₃ could be the result of

• A)a fall in the price level.
• B)a tax cut.
• C)an increased expectation of a recession that lowers people's expected future incomes.
• D)a rise in the price level.
• E)a decrease in the foreign exchange rate.

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Definitions:

Marginal Product

The additional output that is produced by using one more unit of a particular input, holding the levels of all other inputs constant.

Production Function

An economic model that describes the relationship between input resources and the output of goods or services for a business or economy.

Production Function

A mathematical representation that describes how inputs like labor and capital are turned into outputs, such as goods or services.

Inputs

The resources used in the production process to produce goods or services, including labor, materials, and capital.