Refer to the following diagram.
A decline in U.S. housing prices, as in 2007, pushed the AD curve from AD1 to AD2. Dynamic feedback effects that would destabilize the economy could shift:
A. SAS1 to SAS2.
B. AD2 to AD1.
C. SAS2 to SAS3.
D. AD2 to AD3.
Answer: D
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