As the Aggregate Demand Curve Shifts from AD₁ to AD₂

question 85

Multiple Choice

As the aggregate demand curve shifts from AD₁ to AD₂ in Exhibit 14.3, the economy experiences:

• A) cost-push inflation.
• B) demand-pull inflation.
• C) wage-push inflation.
• D) hyperinflation.

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Definitions:

Other Comprehensive Income

Revenues, expenses, gains, and losses that are not included in net income, but instead are recorded directly to shareholders' equity.

Property Plant

Long-term tangible assets used in the operation of a business but not expected to be consumed or converted into cash in the normal course of business.

Foreign Currency

Currency used in a country other than one's own, representing the medium of exchange for international transactions.

Exchange Differences

Financial discrepancies that arise from converting transactions made in foreign currencies into the reporting currency.