Figure 81 Alt Text for Figure 8

question 41

Multiple Choice

Figure 8.1 Alt text for Figure 8.1: In figure 8.1, a graph comparing real GDP and real aggregate expenditure.
Long description for Figure 8.1: The x-axis is labelled, real GDP, Y (trillions of 2002 dollars) .The y-axis is labelled, real aggregate expenditure, AE (trillions of 2002 dollars) .A line, labelled Y = AE, originates at the vertex and slopes up to the top right corner.Another line, labelled AE1, begins a little less than half way along the x-axis and slopes up to the end of the x-axis.Both these lines intersect at point K, approximately three quarters of the way along both lines.Point J is plotted a little less than half way along the line AE1, to the left of point K.Point L is plotted close to the right end of the line AE1, to the right of point K.
-Refer to Figure 8.1.If the economy is at a level of aggregate expenditure given by point K,

• A)the economy is in equilibrium.
• B)production is greater than spending.
• C)production is less than spending.
• D)inventories will increase above their desired level.
• E)firms will have an incentive to increase production.

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Definitions:

Life Cycle

The series of stages through which an organism goes from birth to death.

Environmental Costs

comprise the negative impacts on the environment, including resource depletion and pollution, which are often not reflected in market prices.

Intact Newspapers

Newspapers that have been preserved without any physical alterations, tears, or significant damage.

Serious Pollutant

Substances that cause pollution and can have significant harmful effects on the environment, human health, or both.