Use the Following to Answer Questions

question 217

Multiple Choice

Use the following to answer questions:
-(Figure: Short- and Long-Run Equilibrium II) Refer to Figure: Short- and Long-Run Equilibrium II.If the economy is at equilibrium at E₁,the government should use the _____ fiscal policy to shift the aggregate demand curve to the _____.

• A) expansionary;right
• B) expansionary;left
• C) contractionary;right
• D) contractionary;left

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balance after a certain period, typically incorporating physical counts to determine cost of goods sold.

Cost of Goods Sold

Directly incurred costs for materials and labor necessary for the production of goods a business sells.

Cash Flow Considerations

Refers to an evaluation of how a company generates and uses cash in its business activities, including investments, operations, and financing.

Costing Methods

Various approaches used to calculate the cost of inventory and goods sold, such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or average cost methods.