In the Macroeconomy, Demand-Side Shifts Change

question 46

Multiple Choice

In the macroeconomy, demand-side shifts change:

• A) only the price level in the long run, while output eventually returns to its long-run potential level.
• B) only the output level in the long run, while prices eventually return to their long-run potential levels.
• C) aggregate demand only, which eventually shifts back in the long run.
• D) aggregate demand only, which is why the price level remains unaffected in the long run.

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Definitions:

Services

Intangible products such as healthcare, education, and banking, that provide value or meet needs without producing physical goods.

Dependent

In economic or tax contexts, this refers to someone who relies on another, especially a family member, for financial support and can often be claimed for tax benefits.

International Trade

The exchange of goods, services, and capital between countries or territories, promoting global economic integration.

Trade Deficit

A scenario in which the value of a nation's imports of goods and services surpasses the value of its exports.