Exhibit 10-12 -Consider Exhibit 10-12.Aggregate Demand Is Represented by AD₀ and the AD₀

question 69

Multiple Choice

Exhibit 10-12
-Consider Exhibit 10-12.Aggregate demand is represented by AD₀ and the aggregate supply is AS₁₂₀ since the expected price level is 120.Which of the following describes the current situation for this economy?

• A)an expansionary gap exists
• B)a recessionary gap exists
• C)a long-run equilibrium exists
• D)an employment gap exists
• E)an economic growth gap exists

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Definitions:

Cost

The amount of money or resources expended to acquire an asset, produce goods, or offer a service.

Intangible Asset

This is an asset that lacks physical substance, such as patents, trademarks, and goodwill, yet offers economic value to its owner.

Physical Substance

Refers to tangible assets that have a concrete form and can be touched, as opposed to intangible assets.

Rights

Entitlements or privileges granted, typically to shareholders, such as the right to buy additional shares in certain circumstances.