Use the Figure Below to Answer the Following Question(s)

question 123

Multiple Choice

Use the figure below to answer the following question(s) . Figure 10-5
Given the aggregate demand and aggregate supply conditions depicted in Figure 10-5, which of the following is the most likely occurrence?

• A) an increase in resource prices that will stimulate aggregate demand and direct the economy to long-run equilibrium
• B) a decrease in resource prices that will reduce costs and shift SRAS to the right, directing the economy to long-run equilibrium
• C) a continuation of this price level and output in the long run
• D) a shift in LRAS to the left as the result of an increase in the expected inflation rate

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