Beginning from Long-Run Equilibrium at Point E₁ in Exhibit 14A-1,the

question 32

Multiple Choice

Beginning from long-run equilibrium at point E₁ in Exhibit 14A-1,the aggregate demand curve shifts to AD₂ .The real GDP and price level (CPI) in short-run equilibrium will be:

• A) $12 billion and 200.
• B) $8 billion and 250.
• C) $8 billion and 150.
• D) $12 billion and 250.

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Definitions:

Issuing Stock

The process by which a company releases its shares to the public or existing shareholders to raise capital.

Purchase Assets

The act of acquiring ownership or a controlling interest in physical or intangible items that have value, for operational or investment purposes.

Real Assets

Physical or tangible assets such as real estate, commodities, and natural resources.

Future Cash Flows

Projections of the amount of money that is expected to be generated by an investment in the future.