-Refer to Exhibit 8-3

question 54

Multiple Choice

-Refer to Exhibit 8-3.A shift in aggregate demand from AD₂ to AD₁ could have been the result of

• A) a decrease in the price level.
• B) an increase in the price level.
• C) businesses become more optimistic about future sales.
• D) businesses become more pessimistic about future sales.

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets over a specific time frame, often noted on an annual basis.

Present Value

Present Value is the current value of a future sum of money or stream of cash flows given a specified rate of return, often used in assessing the worth of investments.

Interest Rate

The fee, shown as a percent of the main amount, that a lender imposes on a borrower for the use of assets.

Price Ceiling

A legal maximum price that can be charged for a particular good or service, typically set by government.