FIGURE 23-1 -Refer to Figure 23-1.Assume the Economy Is Initially in Equilibrium

question 126

Multiple Choice

FIGURE 23-1
-Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is .Now,suppose the AE curve shifts to and we move to a new equilibrium level of GDP at and point C on .A possible cause of this change in equilibrium is

• A)an increase in autonomous consumption.
• B)an increase in desired investment.
• C)an exogenous fall in the price level.
• D)an exogenous rise in the price level.
• E)an increase in desired net exports.

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Definitions:

Correcting Entry

A journal entry made to rectify an error in the accounting records, ensuring the accuracy of financial statements.

Equipment

Tangible assets used in operations, not intended for sale, that have a useful life of more than one year.

Supplies

Consumable items or materials used in the day-to-day operations of a business.

Investments

Assets that are purchased with the expectation that they will generate income or appreciate in the future.