Graphically,what Happened to the Aggregate Demand Curve During World War

question 93

Multiple Choice

Graphically,what happened to the aggregate demand curve during World War II?

• A)It did not shift,but the capacity of the economy increased thus shifting the aggregate supply curve to the left.
• B)It did not shift since the economy was already at capacity.
• C)It shifted to the right leading to a big increase in real GDP but to no change in the price level.
• D)It shifted to the right thus causing an inflationary gap.
• E)It shifted to the left since a big portion of expenditures was diverted to military spending.

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