Exhibit 14A-1 Aggregate demand and supply model
Beginning from long-run equilibrium at point E1 in Exhibit 14A-1, the aggregate demand curve shifts to AD2 . The real GDP and price level (CPI) in short-run equilibrium will be:
A. $12 billion and 200.
B. $8 billion and 250.
C. $8 billion and 150.
D. $12 billion and 250.
Answer: A
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