Exhibit 14A-1 Aggregate Demand and Supply Model

question 122

Multiple Choice

Exhibit 14A-1 Aggregate demand and supply model

Beginning from short-run equilibrium at point E₂ in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:

• A) a movement along the AD ₂ curve with a shift in the SRAS ₁ curve.
• B) a movement along the SRAS ₂ curve with a shift in the AD ₂ curve.
• C) a shift in the LRAS curve to an intersection at E ₁ .
• D) no shift of any kind.

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