Refer to the Figure Below

question 22

Multiple Choice

Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as

• A) Aggregate demand shifting rightward
• B) Aggregate demand shifting leftward
• C) Short-run aggregate supply shifting downward
• D) long-run aggregate supply shifting leftward

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue.

Annual Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life on a yearly basis.

Investment Balance

The total value of all investments held by an individual or entity at a given time, including stocks, bonds, and other securities.

Equity Method

An accounting technique used to record investments in other companies when the investing company has significant influence but does not control the investee.