-Based on the Diagram Above,starting from a Long-Run Equilibrium at Point

question 62

Multiple Choice

-Based on the diagram above,starting from a long-run equilibrium at point C,a tax cut that increases aggregate demand from ADI to ADI¹ will lead to a short-run equilibrium at point ________,and eventually to a long-run equilibrium at point ________,due to rising inflation and the raising of real interest rates by the Bank of Canada.

• A) D;B
• B) D;C
• C) B;A
• D) B;C
• E) B;B