The Table Below Shows Data for Five Economies of Similar

question 53

Multiple Choice

The table below shows data for five economies of similar size.Real GDP is measured in billions of dollars.Assume that potential output for each economy is $340 billion.
TABLE 24-1
-Refer to Table 24-1.Consider Economy E.Which of the following best describes the positions of the aggregate demand and aggregate supply curves in this economy?

• A)The AD curve has shifted to the right and the economy is in a short-run disequilibrium position.
• B)The AS curve has shifted to the left and the economy is in a short-run disequilibrium position.
• C)The intersection of the AD and AS curves is to the right of Y*.
• D)The intersection of the AD and AS curves is to the left of Y*.
• E)The intersection of the AD and AS curves coincide with the long-run aggregate supply curve.

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Definitions:

Pollution

The presence of contaminants in the natural environment that cause harm or discomfort to organisms and ecosystems.

Utility Function

A mathematical representation in economics of how a person ranks different bundles of goods according to their level of happiness or satisfaction.

Consumption Bundle

The collection of all the goods and services consumed by a given individual.

Satisfaction

The feeling of pleasure or contentment resulting from achieving one's goals or meeting one's needs and desires.