-Refer to the Above Graph

question 114

Multiple Choice

-Refer to the above graph.If the economy moves from point B₃ to point C₃ because of an increase in aggregate demand,then:

• A) Refer to the above graph.If the economy moves from point B₃ to point C₃ because of an increase in aggregate demand,then:
• B) real wages will rise,reducing profits and thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to B₃.
• C) nominal wages will rise,reducing profits and thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to B₃.
• D) nominal wages will rise,reducing profits and thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to C₂.

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