The Figure Below Shows the Short-Run Aggregate Demand and Supply

question 127

Multiple Choice

The figure below shows the short-run aggregate demand and supply curves of an economy.When real GDP is at Y₂,_____.​ ​
Figure 10.2

• A)potential output is greater than actual output.
• B)there is a recessionary gap.
• C)the price level is likely to fall.
• D)the actual unemployment rate is less than the natural rate of unemployment.
• E)aggregate demand is likely to increase to restore equilibrium.

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Definitions:

Month-End Adjusting Entry

Journal entries made at the end of the reporting period to update the accounts for accurate financial reporting.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on the balance sheet until they are expensed.

Management Services

Provided by a specialized team or firm, these services include a wide range of administrative and support functions to improve efficiency and effectiveness within an organization.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.