If There Is an Aggregate Demand Shock

question 93

Multiple Choice

If there is an aggregate demand shock:

• A) the IS curve shifts to the right.
• B) the IS curve shifts to the left.
• C) there is rightward movement along the IS curve.
• D) there is leftward movement along the IS curve.
• E) Not enough information is given.

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Definitions:

Economic Life

The estimated period over which an asset is expected to be useful and generate revenue, differing from its physical life.

Off-Balance Sheet Financing

Off-Balance Sheet Financing is a financial obligation that is not directly recorded on the company's balance sheet and is used to keep debt-to-equity ratios low and improve financial indicators.

Operating Expenses

Costs associated with a company's main operational activities, excluding cost of goods sold, financing costs, and taxes.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in the net income or loss for that period.