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Figure 12.2

question 147

Multiple Choice

Figure 12.2: Figure 12.2: -Using Figure 12.2,assume that Q<sub>2</sub> is full employment and the economy is in equilibrium at point V.Ceteris paribus a shift in aggregate demand to AD<sub>2</sub> will: A) Result in equilibrium at point W. B) Result in equilibrium at point Y. C) Reduce the GDP gap but would not close it. D) Cause an AD shortfall.
-Using Figure 12.2,assume that Q₂ is full employment and the economy is in equilibrium at point V.Ceteris paribus a shift in aggregate demand to AD₂ will:

Definitions:

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the central bank's discount window; also used in discounted cash flow (DCF) analysis to present value future cash flows.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity and financial stability.

Compounded Monthly

A method of calculating interest where the accumulated interest is added to the principal sum each month, leading to an increase in the total amount of interest earned.

Monthly Payments

Regular payments made over a period, often in the context of loans or leases where the total amount owed is divided into equal installments over time.