Exhibit 5-3 -In Exhibit 5-3 AD₁ and AS₁ Represent the Initial Aggregate

question 44

Multiple Choice

Exhibit 5-3
-In Exhibit 5-3 AD₁ and AS₁ represent the initial aggregate demand and aggregate supply.The initial equilibrium is at point A.Suppose that the price level in Europe falls,what will the new equilibrium be?

• A)P₂ and GDP₁
• B)P₃ and GDP₆
• C)P₆ and GDP₅
• D)P₄ and GDP₃
• E)P₅ and GDP₂

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