Use the Following Graph to Answer the Next Seven Questions

question 22

Multiple Choice

Use the following graph to answer the next seven questions. The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased, with no change in short-run aggregate supply (SRAS) .

-Which of the following would have caused aggregate demand to decrease in the graph,such as occurred during the Great Recession?

• A) an increase in expected income
• B) a decrease in tax rates
• C) a decrease in housing prices and stock prices
• D) an increase in consumer sentiment
• E) an advance in technology

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Definitions:

Rods

Photoreceptor cells in the retina of the eye that function well in low light and are responsible for night vision.

Cones

Photoreceptor cells in the retina of the eye that function best in bright light and enable the perception of color and fine detail.

Dark Adaptation

The process by which the eyes increase their sensitivity to low levels of light, allowing for better vision in the dark.

Rods

Photoreceptor cells in the retina of the eye that are sensitive to low light levels and are primarily responsible for night vision.