For the Following Question(s),assume That the Economy Is in Long-Run

question 18

Multiple Choice

For the following question(s) ,assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below.
Figure 10-19

-Refer to Figure 10-19.There is an increase in the expected rate of inflation.

• A)The aggregate demand curve would shift to the right.
• B)The short-run aggregate supply curve would shift to the left.
• C)The price level would rise and real GDP would remain the same.
• D)All of the above are correct.

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