12.3 Shocks to the System

question 151

Multiple Choice

12.3 Shocks to the System
Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3. Assume the economy is currently at Point A on aggregate supply curve AS₁. An increase in inflationary expectations that causes firms to increase their prices

• A) shifts the aggregate supply curve to AS₀.
• B) shifts the aggregate supply curve to AS₂.
• C) moves the economy to Point C on aggregate supply curve AS₁.
• D) moves the economy to Point B on aggregate supply curve AS₁.