Refer to the Graph $A D _ { 1 }$ Intersects A

question 250

Multiple Choice

Refer to the graph. Assume that the economy is in initial equilibrium where AD $A D _ { 1 }$ intersects A
$A S _ {1 }$ . If
There is an anticipated increase in aggregate demand to AD
$A D _ { 2 }$ , then, according to the rational
Expectations economists, the path for adjustment runs from point

• A) A to B to C.
• B) A to D to C.
• C) A directly to C.
• D) A directly to B.