Like the human body, an economy is made up of many small, specialized, interactive parts; like blood circulates in a human body, money circulates through an economy, providing necessary resources for both households and firms

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

A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.

Taylor has the following assets and liabilities:Two cars$15,000House$400,000Mortgage$300,000Cash$1,000Car loans$5,000Checking account balance$3,000Credit card balance$3,000What is Taylor's wealth?

A. $111,000 B. $105,000 C. $107,000 D. $419,000