Use the Following Graph to Answer the Next Seven Questions

question 83

Multiple Choice

Use the following graph to answer the next seven questions. The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased, with no change in short-run aggregate supply (SRAS) .

-During the Great Recession,real gross domestic product (GDP) fell yet the price level was largely unchanged,as depicted in the graph.Because of this,we know that:

• A) both aggregate demand and long-run aggregate supply increased during the recession.
• B) aggregate demand and long-run aggregate supply both decreased during the recession.
• C) aggregate demand decreased and long-run aggregate supply increased during the recession.
• D) aggregate demand decreased and short-run aggregate supply increased during the recession.
• E) long-run aggregate supply increased and short-run aggregate supply decreased during the recession.

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Definitions:

Sales Revenue

The total amount of money generated from the sale of goods or services by a company before any expenses are deducted.

Sales Commissions

Payments made to sales employees or agents based on the value or volume of sales they generate.

Selling Expenses

Incurred costs associated with the marketing and sale of a product or service, such as advertising, sales commissions, and promotional materials.

Advertising Expenses

Costs incurred in promoting products or services to potential customers through various media channels.