Use the Following to Answer Questions

question 106

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Demand and Aggregate Supply and the Great Depression
-(Exhibit: Aggregate Demand and Aggregate Supply and the Great Depression) During the Great Depression, aggregate demand declined sharply. Suppose the economy moved to a short-run equilibrium at point k. Over time, the economy moved to point j. What could have caused the economy to move to point j?

• A) Falling output prices caused the aggregate supply to shift from SRAS₁ to SRAS₂.
• B) Falling nominal wages caused the aggregate supply to shift from SRAS₁ to SRAS₂.
• C) Expansionary fiscal policies caused the aggregate supply to shift from SRAS₁ to SRAS₂.
• D) A decline in the demand for U.S. goods by foreign countries aggregate supply to shift from SRAS₁ to SRAS₂.

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