If the Aggregate Demand Curve Shifts to the Left in the Short

question 26

Multiple Choice

If the aggregate demand curve shifts to the left in the short run then the long-run equilibrium will be at a:

• A) higher price level and higher level of output.
• B) higher price level and lower level of output.
• C) lower price level and same level of output.
• D) lower price level and lower level of output.

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Definitions:

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the principal, paid by the borrower for the use of borrowed funds.

Long Position

Owning or buying securities with the expectation that their value will increase over time, allowing the investor to profit from the appreciation.

Wheat Future Contract

A legal agreement to buy or sell wheat at a predetermined price at a specified time in the future, used for hedging or speculation.

Spot Price

The current market price at which an asset, like a commodity, currency, or security, can be bought or sold for immediate delivery.