Figure 13-6 Shows the Short-Run Macroeconomic Equilibrium of an Economy

question 62

Multiple Choice

Figure 13-6 shows the short-run macroeconomic equilibrium of an economy. Which of the following will happen in the short run if there is a decrease in aggregate demand?Figure 13-6

• A)The creation of an inflationary gap
• B)The creation of a recessionary gap
• C)The restoration of the economy to its long-run equilibrium
• D)An increase in the aggregate price level
• E)An increase in the level of unemployment

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Definitions:

Paid-in Capital

The total amount of money that shareholders have invested in a company through the purchase of its stock, not including the stock's par or face value.

Retained Earnings

Retained earnings are the portion of a company's profits that are kept or retained within the company for reinvestment in business operations, rather than being paid out as dividends to shareholders.

Retained Earnings

The portion of a company’s profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment.

Cumulative Net Income

The total amount of net income earned by a company over a specified period, typically since its inception.