Refer to the Graph Above

question 84

Multiple Choice

Refer to the graph above. Assume that the economy is in initial equilibrium where AD₁ intersects AS₁. If there is an unanticipated increase in aggregate demand, then according to new classical economics the economy will self-correct with a:

• A) Movement from point B to point A
• B) Movement from point A to point B
• C) Shift from AS₁ to AS₂
• D) Shift from AD₂ to AD₁

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