Refer to the Following Figure to Answer the Next

question 82

Multiple Choice

Refer to the following figure to answer the next questions.

-Based on the figure, which of the following would cause the aggregate demand curve to shift from AD₂ to AD₁?

• A) The economy has been producing more than its full-employment output level and wages and input prices begin to rise.
• B) There is an increase in the price of oil.
• C) There is an increase in the general price level that reduces real wealth.
• D) There is a reduction in consumer confidence about future growth in the economy.
• E) There is a reduction in income tax rates.

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Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning its consumption by one individual does not reduce its availability to others.

Common Resource

A resource like air or water that is not owned by anyone, but can be used by everyone, often leading to overuse and depletion.

Low Productivity

A situation where there is an inefficient level of output produced relative to the input used, often leading to decreased economic performance.

Common Resource

A natural or man-made resource that is available to all but can be depleted if overused, such as fisheries, clean air, or public parks.