Figure 17-3 -Refer to Figure 17-3.Suppose the Economy Is at Point A.The

question 68

Multiple Choice

Figure 17-3

-Refer to Figure 17-3.Suppose the economy is at point a.The rational expectations hypothesis suggests that an increase in aggregate demand will result in the economy moving from ________ whereas new Keynesian economics suggests that it will move from _______.

• A)point a to point d; point a to point b.
• B)point a to point d; point a to point c.
• C)point a to point b; point a to point d.
• D)point a to point c; point a to point d.

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