Using Figure 1 Above, If the Aggregate Demand Curve Shifts

question 94

Multiple Choice

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

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

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Definitions:

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services, an integral part of manufacturing costs.

Raw Materials

The basic substances used in production processes to create goods, often transformed or converted during the manufacturing.

Cost of Goods Available

The total cost of inventory that is available for sale during a given period.

Net Operating Income

The earnings from a company's core business operations, indicating the efficiency in managing its operational costs.