Refer to the Graph Above

question 60

Multiple Choice

Refer to the graph above. Assume that the economy is in initial equilibrium where AD₁ intersects AS₁. If there is a decrease in aggregate demand to AD₂, then according to mainstream economists, if prices are flexible and wages are not, this will result in an equilibrium at point:

• A) B
• B) C
• C) D
• D) E

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Definitions:

Slaveholding

The practice or condition of owning slaves, historically seen in contexts where slavery was legally recognized.

Free States

Historically, states in the United States that were anti-slavery and did not permit slavery within their boundaries before the Civil War.

Large States

In the context of U.S. history, refers to states with larger populations that sought greater representation in Congress during the formation of the Constitution.

Small States

Countries or regions with relatively low population and/or land area, often with limited economic or political power on the global stage.