Figure 32-5 Refer to This Diagram of the Open-Economy Macroeconomic Model to Model

question 64

Multiple Choice

Figure 32-5
Refer to this diagram of the open-economy macroeconomic model to answer the questions below.

-Refer to Figure 32-4.Suppose that the government goes from a budget surplus to a budget deficit.The effects of the change could be illustrated by

• A)shifting the demand curve in panel a to the right and the demand curve in panel c to the left.
• B)shifting the demand curve in panel a to the left and the supply curve in panel c to the left.
• C)shifting the supply curve in panel a to the right and the demand curve in panel c to the right.
• D)shifting the supply curve in panel a to the left and the supply curve in panel c to the left.

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Definitions:

Contribution Margin Ratio

The contribution margin ratio calculates the proportion of sales revenue that exceeds variable costs, showing what portion of sales contributes to covering fixed costs and generating profit.

Selling Price

The amount at which a product or service is sold to customers, determined by factors such as market demand, production costs, and competition.

Variable Cost

Costs that vary directly with the level of production or business activity.

Sales Dollars

The revenue generated from goods or services sold, expressed in dollars.