Using Figure 1 Above, If the Aggregate Demand Curve Shifts

question 101

Multiple Choice

Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:

• A) P1 and Y2.
• B) P2 and Y2.
• C) P1 and Y1.
• D) P4 and Y2.

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Definitions:

Par Value

The nominal or face value of a stock or bond, typically used as an accounting standard rather than reflecting market value.

Fair Value

The price achievable in the sale of an asset or required to settle a liability in a seamless transaction with market participants at the date set for evaluation.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on major company decisions.

Acquisition

The process by which one company purchases most or all of another company's shares or assets, gaining control over the acquired company.