Refer to the Figure Below

question 1

Multiple Choice

Refer to the figure below.Suppose the economy is initially in equilibrium with output Y₂ and inflation rate of ₃.An increase in military spending will:

• A)shift AD from AD₂ to AD₁.
• B)shift AD from AD₁ to AD₂.
• C)shift AS from AS₂ to AS₁.
• D)shift AS from AS₁ to AS₂.

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