Using a Graph of the AD and Long-Run Aggregate Supply

question 120

Multiple Choice

Using a graph of the AD and long-run aggregate supply curves,the Internet revolution of the 1990s caused:

• A) both real growth and inflation to increase.
• B) both real growth and inflation to decrease.
• C) real growth to increase and inflation to decrease.
• D) real growth to decrease and inflation to increase.

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Definitions:

Liability Creation

The process of incurring obligations or debts by a company through its operations or financial activities.

Revenue Recognition

The accounting principle that dictates the specific conditions under which income becomes recognized as revenue.

Revenue Recognition Principle

An accounting principle that dictates the conditions under which revenue is recognized and recorded.

Performance Obligations

Promises in a contract to transfer goods or services to a customer, central to revenue recognition principles.