The Figure Below Shows Short-Run Equilibrium in an Aggregate Demand-Aggregate

question 13

Multiple Choice

The figure below shows short-run equilibrium in an aggregate demand-aggregate supply model.If the economy is currently producing Y₁ level of output,long-run equilibrium will be established if:​ ​
Figure 10.5

• A)the short-run aggregate supply curve shifts to the right to remove the expansionary gap.
• B)the short-run aggregate supply curve shifts to the left to remove the expansionary gap.
• C)the short-run aggregate supply curve shifts to the left to remove the recessionary gap.
• D)the short-run aggregate supply curve shifts to the right to remove the recessionary gap.
• E)there is a leftward shift of the aggregate demand curve.

Grasp the significance of per capita income and GDP in assessing economic health.

Recognize the importance of consumer price index in measuring inflation.

Understand government fiscal policies related to budget deficits and surplus.

Know the historical development of the American economy, including the transition from agriculture to industry.

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Definitions:

Low Volume

Refers to the production or sale of goods in relatively small quantities.

High Variety

Pertains to offering a wide assortment of products or services within a category, often aimed at catering to diverse customer preferences and enhancing market reach.