Figure 14.2

question 2

Multiple Choice

Figure 14.2
-Using Figure 14.2,a shift in aggregate demand from AD₄ to AD₅ 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 the 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:

Efficient Levels

Optimal production or operation points where resources are used in the most effective manner without waste.

Production Possibilities Frontier

A graph that shows the highest possible production levels for two or more products based on certain input resources.

Infeasible Levels

Conditions or scenarios that cannot be achieved or realized due to practical or theoretical constraints.

Efficient

Achieving maximum productivity with minimum wasted effort or expense, often in the context of economic resource allocation.