Graphically the Intersection of the Aggregate Demand Curve, the Short-Run

question 2

Multiple Choice

Graphically the intersection of the aggregate demand curve, the short-run and long-run aggregate supply curves determines:

• A)the recessionary gap.
• B)short-run equilibrium.
• C)the expansionary gap.
• D)long-run equilibrium.

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Definitions:

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date, used in the trading of currencies, commodities, and financial instruments.

Risk-Free Rate

A speculative return rate on a risk-free investment, often exemplified by government bond yields.

Future Exchange Rate

The future exchange rate is the agreed-upon rate at which two currencies will be exchanged on a specified future date, used in hedging and trading strategies.

Spot Exchange Rate

The present exchange rate for immediate swap of one currency to another.