Refer to the graph below. Assume that the economy is in initial equilibrium where AD1 intersects AS1. If there is an unanticipated increase in aggregate demand, then according to new classical economics the economy will self-correct with a:





A. Movement from point B to point A

B. Movement from point A to point B

C. Shift from AS1 to AS2

D. Shift from AD2 to AD1


C. Shift from AS1 to AS2

Economics

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