Figure 83 Alt Text for Figure 8

question 8

Multiple Choice

Figure 8.3 Alt text for Figure 8.3: In figure 8.3, a graph comparing real GDP and real aggregate expenditure.
Long description for Figure 8.3: 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) .Line Y = AE, originates at the vertex and slopes up to the top right corner.Line 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 3 quarters of the way along both lines.Point J is plotted a little less than half way along line AE1, to the left of point K.Point L is marked close to the right end of the line AE1, to the right of point K.
-Refer to Figure 8.3. At point J in the figure above, which of the following is true?

• A)Unemployment will fall.
• B)The economy has achieved macroeconomic equilibrium.
• C)Actual inventories are greater than planned inventories.
• D)GDP will be decreasing.
• E)Aggregate expenditure is less than GDP.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a share in the ownership of a company and a claim on a part of its profits.

Treasury Bills

Treasury bills are short-term government securities issued at a discount from the face value and mature at par, used by governments to raise funds to meet short-term financial needs.

Unsystematic Risk

The risk that is unique to a specific company or industry, which can be mitigated through diversification.