-In the Above Figure, If Initial Equilibrium Is at Point

question 89

Multiple Choice

-In the above figure, if initial equilibrium is at point A and if there is an unanticipated increase in aggregate demand from AD1 to AD2, then

• A) in the short run real output will remain at Y1.
• B) in the short run real output will increase above Y1, but in the long run it will return to Y1.
• C) in the long run real output will increase above Y1.
• D) real output will increase above Y1 in both the short run and in the long run.

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