When Using the AD-AS Model to Understand Business Cycles, the Question

question 4

Multiple Choice

When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:

• A)"what factors move the economy away from long-run equilibrium?"
• B)"what factors move aggregate demand and aggregate supply in different directions?"
• C)"what factors increase or decrease potential GDP?"
• D)"what factors increase or decrease the expected rate of inflation?"

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Definitions:

Budgeted Sales

The forecasted sales revenue a company expects to generate in a future period, based on market analysis, historical data, and sales targets.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period of time, helping an organization to manage its cash balance.

Office Salaries Expense

An account that records the total salary expenses for office employees over a certain period.

Travel Expense

Costs associated with traveling for the purpose of conducting business, including transportation, lodging, and meals, which are often reimbursable by an employer.