Figure 13-2 Shows Shifts in the Aggregate Demand Curve

question 64

Multiple Choice

Figure 13-2 shows shifts in the aggregate demand curve. Which of the following combinations would be illustrated by a shift in aggregate demand from AD₀ to AD₂?Figure 13-2​

• A)A decrease in the minimum wage level combined with an increase in imports
• B)An increase in the price levels combined with an increase in the rates of interest
• C)An increase in business tax rates combined with a decrease in consumer confidence
• D)An increase in the demand for domestic goods combined with an increase in welfare activities of the government
• E)An increase in imports combined with even higher increase in exports

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Definitions:

Adjusting Entry

An accounting record entry made at the conclusion of an accounting period to distribute income and expenses to the correct period.

Purchased

The act of acquiring goods or services in exchange for money, often recorded in accounting as an increase in assets or expenses.

Insurance Policy

A contract between an insurer and a policyholder specifying the claims which the insurer is legally required to pay in exchange for an upfront premium.

Adjusting Entry

A journal entry made at the end of an accounting period to record unrecognized income or expenses, ensuring the financial statements are accurate.