In a Diagram That Includes Both the IA Line and the AD

question 169

Multiple Choice

In a diagram that includes both the IA line and the AD curve, the price adjustment resulting from an increase in spending is shown by

• A)the AD curve shifting to the left.
• B)the AD curve shifting to the right.
• C)the IA line shifting down.
• D)the IA line shifting up.
• E)the movement along the IA line.

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Definitions:

Savings

The portion of income not spent on consumption or taxes, often set aside for future use or investment.

Cash In

The process of liquidating assets or securities for the purpose of extracting cash, often related to investments or savings.

Accounts

Records or statements that track financial transactions and positions of an individual or organization.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.