Exhibit 14-8 Aggregate Demand and Supply

question 58

Multiple Choice

Exhibit 14-8 Aggregate demand and supply

-In Exhibit 14-8,when aggregate demand shifts from AD₄ to AD₅,the economy experiences:

• A) cost push-inflation.
• B) cost-pull inflation.
• C) demand-push inflation.
• D) demand-pull inflation.
• E) price-pull inflation.

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Definitions:

Purchase Costs

The actual amount paid or the expense incurred in acquiring goods or services, including the product price, shipping, and handling fees.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Physical Inventory

The process of counting the actual inventory on hand at the end of an accounting period, usually for verification purposes.

Inventory System

A system for tracking inventory levels, orders, sales, and deliveries, which can be manual or technologically driven, helping businesses manage their stock efficiently.