Figure 16-11 -Refer to Figure 16-11.In the Graph Above,the Shift from AD₁

question 79

Multiple Choice

Figure 16-11
-Refer to Figure 16-11.In the graph above,the shift from AD₁ to AD₂ represents the total change in aggregate demand.If government purchases increased by $50 billion,then the distance from point A to point B ________ $50 billion.

• A)would be equal to
• B)would be greater than
• C)would be less than
• D)may be greater than or less than

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.

Net Sales

Revenue from goods or services sold minus returns, allowances, and discounts.

Return On Equity (ROE)

A measure of financial performance, calculated by dividing net income by shareholder equity, indicating how well a company uses investments to generate earnings growth.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically noted on the income statement.