Figure 10-18 -Beginning from Long-Run Equilibrium at Point E₁ in Figure 10-18,the

question 157

Multiple Choice

Figure 10-18

-Beginning from long-run equilibrium at point E₁ in Figure 10-18,the aggregate demand curve shifts to AD₂.The real GDP and price level (CPI) in short-run equilibrium will be

• A)$10 billion and 200.
• B)$10 billion and 150.
• C)$10 billion and 100.
• D)$4 billion and 150.

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Definitions:

Discount

A reduction from the full price or value of a good, service, or financial instrument.

Face Amount

The nominal value stated on the face of a financial instrument, such as a bond, that the issuer promises to pay at maturity.

Prepaid Property Tax

An expense recorded when property taxes are paid in advance before they are due, treated as an asset on the balance sheet.

Property Tax Expense

An expense recorded to reflect the cost of property taxes levied by local governments, often related to real estate owned.