Use the Following to Answer Questions

question 78

Multiple Choice

Use the following to answer questions :
Exhibit: AD-AS Shifts

-(Exhibit: AD-AS Shifts) Starting from long-run equilibrium at A with output equal to Y and the price level equal to P₁,a cost-push inflation would be represented by a shift from:

• A) AD₁ to AD₂.
• B) AD₁ to AD₃.
• C) AS₁ to AS₂.
• D) AS₁ to AS₃.

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Definitions:

Productivity

The efficiency of production measured by the output per unit of input, such as labor or capital, influencing economic growth and living standards.

Units of Output

The measurement of production amount, typically quantified in terms of units produced.

Average Worker

The term "average worker" typically refers to a hypothetical or statistical individual whose job characteristics (wages, hours worked, skills) represent the mean or median of a larger group.

Business Cycle

The natural rise and fall of economic growth that occurs over time, marked by periods of expansion, peak, recession, and recovery.