Use the Following to Answer Question

question 8

Multiple Choice

Use the following to answer question :
Figure: AD-AS Model
-(Figure: AD-AS Model) Look at the figure AD-AS Model. Suppose the economy is at Y_E with a price level of P_1. Which of the following would represent the new long-run equilibrium position if the aggregate demand curve shifted to the right from AD₁ to AD₂ as a result of an increase in the money supply?

• A)Y_E and P₂
• B)Y_E and P₁
• C)Y₁ and P₂
• D)Y_E and P₃

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Definitions:

FMV

Fair Market Value, the price that property would sell for on the open market.

Basis

The amount of investment in property for tax purposes; used to determine the gain or loss on the sale, exchange, or disposal of the property.

Taxable Gain

The profit arising from the sale or exchange of an asset that is subject to income tax.

Charitable Contribution

Donations made to qualified organizations that may be tax-deductible for the donor.