-In the Above Figure, If Initial Equilibrium Is at Point

question 248

Multiple Choice

-In the above figure, if initial equilibrium is at point A and there is a fully anticipated increase in aggregate demand from AD₁ to AD₂ due to an anticipated increase in the money supply, then

• A)the economy will move directly from point A to point C without passing through point B.
• B)the economy will move directly from point A to point B, and will remain at point B in the long run.
• C)the price level will shift to P₂ in the short run.
• D)the price level will shift to P₂ in the long run.

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Definitions:

Production Jobs

Tasks or operations involved in the creation or manufacturing of goods.

Profit

The financial gain achieved when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain these activities.

Materials Ledger

A detailed record that tracks the quantity and value of materials on hand in an organization.

General Ledger

A comprehensive accounting record of all transactions that have occurred in a business over a period of time.