Exhibit 14-8 Aggregate Demand and Supply

question 173

Multiple Choice

Exhibit 14-8 Aggregate demand and supply

-In Exhibit 14-8,if aggregate demand shifts from AD₃ to AD₄,real GDP will:

• A) rise from $7.0 to $8.0, and the price level will rise from 120 to 140.
• B) rise from $7.0 to $8.0, and the price level will rise from 120 to 170.
• C) rise from $7.0 to $8.0, and the price level will rise from 100 to 140.
• D) not change, and the price level will rise from 120 to 140.
• E) rise from $4.0 to $8.0, and the price level will rise from 120 to 140.

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Definitions:

Estimated Costs

Projected expenses or costs that are predicted in advance of actually incurring them, often used for budgeting and planning purposes.

Yield Pricing

A strategy in price management where prices are adjusted based on demand to maximize revenue.

Differential Analysis

A financial technique used to evaluate decisions by examining the costs and benefits of alternative actions and their impacts on company finances.

Bottleneck

A point of congestion in a production system that occurs when workloads arrive too quickly for the production process to handle, thereby limiting throughput.