Exhibit 14A-1 Aggregate Demand and Supply Model

question 47

Multiple Choice

Exhibit 14A-1 Aggregate demand and supply model

Beginning from long-run equilibrium at point E₁ in Exhibit 14A-1, the aggregate demand curve shifts to AD₂ . The real GDP and price level (CPI) in short-run equilibrium will be:

• A) $12 billion and 200.
• B) $8 billion and 250.
• C) $8 billion and 150.
• D) $12 billion and 250.

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