Using Figure 1 Above, If the Aggregate Demand Curve Shifts

question 153

Multiple Choice

Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:

• A) P1 and Y2.
• B) P3 and Y1.
• C) P2 and Y3.
• D) P2 and Y2.

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Definitions:

Separation of Powers

The division of governmental powers among independent branches to prevent the concentration of power and provide checks and balances.

Charles Beard

An influential American historian known for his interpretation of the economic interests that motivated the Founding Fathers in writing the Constitution.

Constitution

The basic rules and recognized examples based on which a state or different entity is administered.

Checks and Balances

A system in which different branches of government have powers that can limit or check the powers of the others, thus ensuring no single branch becomes too powerful.