Figure 14.2

question 4

Multiple Choice

Figure 14.2
-Using Figure 14.2,a shift in aggregate demand from AD₁ to AD₂ will cause,ceteris paribus:

• 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 the price level,but no change in real output.

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Definitions:

Market Demand

The total quantity of a good or service that all consumers in the market are willing and able to purchase at different prices.

Market Supply

The total quantity of a good or service that all producers in a market are willing and able to sell at various price levels.

Demand Curve

A graphical representation that shows the quantity of a product or service desired by buyers at various price levels.

Tax

Mandatory financial charges or other types of levies imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.