Exhibit 11-2 -If the Actual Price Level in Exhibit 11-2 Exceeds the 11-2

question 139

Multiple Choice

Exhibit 11-2
-If the actual price level in Exhibit 11-2 exceeds the expected price level, then

• A)equilibrium output might be Y₂ in the short run
• B)equilibrium output might be Y₁ in the short run
• C)equilibrium output might be Y₃ in the short run
• D)potential output is greater than actual output
• E)unemployment is above the natural rate

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Definitions:

Incremental Annual Revenues

The additional revenue generated from a specific action or decision, measured on an annual basis.

Scrap Value

The estimated resale value of an asset at the end of its useful life, typically associated with machinery, equipment, or vehicles.

Payback Period

The length of time required to recover the cost of an investment or project from its cash flows.

Initial Investment

The initial amount of money invested in a project or startup business.