Figure 35-2 Use the Pair of Diagrams Below to Answer the Following

question 57

Multiple Choice

Figure 35-2
Use the pair of diagrams below to answer the following questions.
-Refer to Figure 35-2.If the economy starts at C and 1,then in the short run,a decrease in the money supply moves the economy to

• A)E and 1.
• B)D and 2.
• C)D and 3.
• D)None of the above is correct.

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Definitions:

Labor

The physical and mental effort used in the production of goods and services.

Good

A material item or service that can be bought, sold, or traded, providing utility or satisfaction to the buyer.

Circumstances

A fact or condition connected with or relevant to an event or action, often influencing it or determining the outcomes.

Economic Theory

A set of principles and models that attempts to explain how economies operate and how economic agents interact.