In Year 1 the Price of Good X Is $10

question 203

Multiple Choice

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

• A) The supply of good X was higher in year 2 than in year 1 and the demand for good X was the same in year 2 as in year 1.
• B) The demand for good X was higher in year 2 than in year 1 and the supply of good X was the same in year 2 as in year 1.
• C) Both the demand for,and supply of,good X were higher in year 2 than in year 1.
• D) b or c
• E) a,b,or c

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Definitions:

Income

is the money received by individuals or entities, typically in the form of wages, salaries, rent, interest, dividends, or profits, for providing labor, capital, or resources.

Aggregate Expenditure Line

The aggregate expenditure line is a graphical representation in macroeconomics that shows all planned expenditures of an economy at different levels of income or GDP, indicating total spending on goods and services in an economy.

Aggregate Demand Curve

A graph that represents the total demand for all goods and services in an economy at various price levels.

Aggregate Expenditure

Aggregate expenditure is the total amount spent on goods and services in an economy at a given overall price level and in a given time period.