Figure 16-3 -Refer to the Figure 16-3.Starting from C and 3,where Does

question 42

Multiple Choice

Figure 16-3
-Refer to the Figure 16-3.Starting from c and 3,where does an increase in aggregate demand move the economy to,in the short run and the long run?

• A) a and 1 in the short run,b and 2 in the long run
• B) b and 2 in the short run,a and 1 in the long run
• C) d and 4 in the short run,e and 5 in the long run
• D) d and 2 in the short run,a and 5 in the long run

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Definitions:

Total Revenue

The entire amount of income generated by the sale of goods or services before any expenses are deducted.

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision to pursue a certain action.

Economic Efficiency

The optimal distribution of resources in a manner that maximizes the total utility to all individuals in the economy.

Governmental Direction

Guidance or regulation provided by government bodies to influence or control certain activities, industries, or economic policies.