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

question 139

Multiple Choice

The figure below shows the short-run aggregate demand and supply curves of an economy.If the economy is currently producing at Y₂,long-run equilibrium will most likely be established by a(n) :​ ​
Figure 10.2

• A)increase in short-run aggregate supply.
• B)decrease in short-run aggregate supply.
• C)decrease in potential output.
• D)increase in potential output.
• E)rightward shift of the aggregate demand curve.

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Definitions:

WACC

A calculation known as the Weighted Average Cost of Capital determines a corporation's capital costs by proportionally weighting different categories of capital.

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Tax Rate

The rate at which taxes are applied to a person or company's income.

WACC

The Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.