Refer to the Above Diagram

question 189

Multiple Choice

Refer to the above diagram.If the price level rises above P₁ because of an increase in aggregate demand,the:

• A) economy will move up along curve B and output will temporarily increase.
• B) long-run aggregate supply curve C will shift upward.
• C) short-run aggregate supply curve B will automatically shift to the right.
• D) economy's output first will decline,then increase,and finally return to Q₁.

---

Definitions:

Net Loss

The total amount by which expenses exceed revenues over a certain period, indicating financial loss.

Tariff

A levy placed by a government on imported goods and services from abroad, aimed at regulating the amount of trade and safeguarding local businesses.

United States

A country located primarily in North America, known for its large economy, diverse population, and significant influence on global affairs.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, typically seen as profit.