Refer to the Diagram $P _ { 1 }$ Because of an Increase in Aggregate Demand,
the
A) Economy

question 150

Multiple Choice

Refer to the diagram. If the price level rises above $P _ { 1 }$ because of an increase in aggregate demand,
The

• A) economy will move up along curve B and output will temporarily increase.
• B) long-run aggregate supply curve C will shift upward.
• C) short-run aggregate supply curve B will automatically shift to the right.
• D) economy's output ?rst will decline, then increase, and ?nally return to \(Q _ { 1 }\)

---

Definitions:

Marginal Cost

An adjustment in the total expenses resulting from producing one additional unit.

Weekly Wage

The amount of compensation a worker receives at the end of each week for their labor.

University

An institution of higher education and research, which grants academic degrees in various disciplines.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market without any close substitutes, holding significant market power.