Figure 10-4
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In Figure 10-4, if full employment occurs at 5,000 and the price level is currently 130, then we can expect the
A. aggregate supply curve to shift to the left until a new equilibrium is established at an output level of 4,000.
B. aggregate demand curve to shift to the right until a new equilibrium is established at an output level of 6,000.
C. price level to fall to 110.
D. aggregate demand to shift to the left and aggregate supply to shift to the right until the price level reaches 130.
Answer: C
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