The Figure Below Shows the Aggregate Demand and Supply Curves

question 103

Multiple Choice

The figure below shows the aggregate demand and supply curves for the U.S.In this figure,as the aggregate demand curve shifts from AD to AD',the equilibrium price level in period 1:​ ​
Figure 5.2
​

• A)increases from 3 to 4.
• B)decreases from 4 to 3.
• C)decreases from 4 to 1.
• D)increases from 1 to 4.
• E)decreases from 4 to 2.

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Definitions:

Short Run

A time period during which at least one factor of production is fixed, limiting the capacity to adjust fully to market conditions.

Maximum Total Profits

The highest possible profit that a firm can achieve, determined by subtracting total costs from total revenues at the optimal level of production.

Quantity

The quantity of a tangible or intangible asset viewed as a single entity or a collective sum.

Graph

A visual representation of data, showing the relationship between variables.