-In the Above Figure, If Initial Equilibrium Is at Point

question 97

Multiple Choice

-In the above figure, if initial equilibrium is at point A and if there is an unanticipated increase in aggregate demand from AD₁ to AD₂, then

• A)in the short run real output will remain at Y₁.
• B)in the short run real output will increase above Y₁, but in the long run it will return to Y₁.
• C)in the long run real output will increase above Y₁.
• D)real output will increase above Y₁ in both the short run and in the long run.

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