-In the Above Figure, If Initial Equilibrium Is at Point

question 188

Multiple Choice

-In the above figure, if initial equilibrium is at point A and if there is an unanticipated increase in aggregate demand from AD₁ to AD₂, then

• A) in the short run real output will remain at Y₁.
• B) in the short run real output will increase above Y₁, but in the long run it will return to Y₁.
• C) in the long run real output will increase above Y₁.
• D) real output will increase above Y₁ in both the short run and in the long run.

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Definitions:

Fictitious

Not real or based on factual events; products of imagination or fabrication.

Cost of Parking

The expense associated with using a parking space for a vehicle, which may vary based on location, demand, and time spent, influencing urban mobility and real estate values.

Price

The amount of money expected, required, or given in payment for something, often determined by factors like cost, demand, and competition.

Predatory Pricing

A firm’s practice of setting a very low price for one or more of its products with the intent to drive its competition out of business; illegal under both the Sherman Antitrust Act and the Federal Trade Commission Act.