Exhibit 14A-6 Aggregate Demand and Supply Model

question 58

Multiple Choice

Exhibit 14A-6 Aggregate demand and supply model

-Given the shift of the aggregate demand curve from AD₁ to AD₂ in Exhibit 14A-6,the real GDP and price level (CPI) in long-run equilibrium will be:

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

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Definitions:

Cost of Equity

Cost of equity is the return that investors expect from an investment in a company, considering the risk of investing in its equity.

Stock Split

An action taken by a company to divide its existing shares into multiple shares to boost the liquidity of the shares, though the market value of the company does not change.

Market Price

The rate at which an asset or service is currently trading in the market.

Shares Outstanding

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.