Exhibit 14-8 Aggregate Demand and Supply

question 115

Multiple Choice

Exhibit 14-8 Aggregate demand and supply

-In Exhibit 14-8,if aggregate demand shifts from AD₃ to AD₂,real GDP will:

• A) fall from $7.0 to $4.0, and the price level will not change.
• B) not change, and the price level will fall from 120 to 100.
• C) fall from $7.0 to $3.0, and the price level will fall from 120 to 100.
• D) fall from $8.0 to $4.0, and the price level will fall from 120 to 100.
• E) fall from $7.0 to $4.0, and the price level will fall from 120 to 100.

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