In the Dynamic Aggregated Demand and Aggregate Supply Model,if AD

question 221

Multiple Choice

In the dynamic aggregated demand and aggregate supply model,if AD shifts further than AS

• A)inflation occurs.
• B)deflation occurs.
• C)stagflation occurs.
• D)disinflation occurs.

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Definitions:

Price Floor

A government or regulatory-imposed minimum price set above the equilibrium price, preventing market prices from falling below it.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, measured as the area above the supply curve and below the market price.

Government Spend

Public expenditure by government entities on goods, services, and infrastructure for a country's economy and citizens' welfare.

Import Quota

Limit on the quantity of a good that can be imported.