Using Figure 8

question 71

Multiple Choice

Using Figure 8.7,a shift in aggregate demand from AD₁ to AD₂ is most likely to cause

• A)An increase in real output and an increase in the price level.
• B)An increase in real output but no change in the price level.
• C)An increase in price level but no change in real output.
• D)A decrease in price level but no change in real output.

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Definitions:

Tariff

A tax imposed on imported or, less commonly, exported goods with the aim of raising the cost to influence trade dynamics.

Domestic Consumers

Individuals or households within a country who purchase goods and services for personal use.

Domestic Producers

Local manufacturers or firms that produce goods within a country's borders for the domestic market.

Producer Surplus

The variance between the expected payment by producers for a good or service and the real compensation they achieve.