Use the Following to Answer Question

question 8

Multiple Choice

Use the following to answer question :
Figure: AD-AS Model
-(Figure: AD-AS Model) Look at the figure AD-AS Model. Suppose the economy is at Y_E with a price level of P_1. Which of the following would represent the new long-run equilibrium position if the aggregate demand curve shifted to the right from AD₁ to AD₂ as a result of an increase in the money supply?

• A)Y_E and P₂
• B)Y_E and P₁
• C)Y₁ and P₂
• D)Y_E and P₃

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