Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:

A. P2 and Y2.
B. P1 and Y2.
C. P4 and Y2.
D. P1 and Y1.


Answer: B

Economics

You might also like to view...

Consider the market for dollars. The higher the exchange rate, the ________ is the expected profit from holding foreign currency and the greater is the ________

A) larger; quantity of dollars supplied B) larger; leftward shift in the demand curve for dollars C) smaller; quantity of dollars supplied D) smaller; leftward shift in the demand curve for dollars

Economics

As a percentage of GDP, health care spending on Medicare and Medicaid is expected to double over the next 40 years unless health care costs begin to grow at a slower rate

Indicate whether the statement is true or false

Economics

If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms' inventories? How do firms change their production? And what happens to real GDP?

What will be an ideal response?

Economics

If a lender charged a 4 percent nominal interest rate and the expected inflation rate is 1 percent, what is the difference between the real rate the lender received and the real rate the lender expected when actual inflation ended up being 1 percent?

a. 2 percent b. 4 percent c. -4 percent d. 1 percent e. 0 percent

Economics