Refer to the Figure and Assume the Economy Initially Is

question 66

Multiple Choice

Refer to the figure and assume the economy initially is in equilibrium at point a. In the new classical theory, a fully anticipated increase in aggregate demand from AD₂ to AD₁ would move the economy

• A) directly from a to d.
• B) from a to b to d.
• C) from a to e to d.
• D) directly from a to f.