If There Is an Aggregate Demand Shock

question 93

Multiple Choice

If there is an aggregate demand shock:

• A) the IS curve shifts to the right.
• B) the IS curve shifts to the left.
• C) there is rightward movement along the IS curve.
• D) there is leftward movement along the IS curve.
• E) Not enough information is given.

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Definitions:

Shortage

A market condition where the demand for a product exceeds the supply available at a specific price.

Minimum Wages

The lowest legal hourly pay that employers can offer to workers, intended to protect employees from unduly low earnings.

Federal Level

Pertaining to the national government, as opposed to state, local, or municipal levels, involving decisions, laws, and policies that affect the entire country.

Equilibrium Price

A financial point in the marketplace where goods supplied and goods demanded are identical in quantity.