Aggregate Demand and Supply Analysis

question 65

Multiple Choice

Aggregate Demand and Supply Analysis
-In the figure above,assume that output is $10.5 trillion,while potential output is $12 trillion.Suppose that a combination of fiscal stimulus and recovery of consumer and business confidence shifts the IS and AD curves,as shown in the figure,while monetary policy sets the real interest rate at one percent.If the short-run aggregate supply curve is π =
Y - 13,then the resulting values of output and inflation are ________.

• A)$12 trillion & 3 percent
• B)$13.5 trillion & 5 percent
• C)$9.75 trillion & 0 percent
• D)$13.5 trillion & 0 percent
• E)$12.5 trillion & 2 percent

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Definitions:

Service-intensive Business

A type of business that relies heavily on providing services rather than goods, characterized by a high level of customer interaction and service delivery.

Vision

A forward-looking statement or concept that outlines what an organization aims to achieve in the future, serving as a guide for its intentions and directions.

Customer Base

The group of consumers who repeatedly purchase the goods or services of a business, forming the foundation of the company's sales.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to fund its operations and investments.