FIGURE 23-1 Refer to Figure 23-1.Assume the economy is initially in equilibrium with desired aggregate expenditure equal to real GDP at point V.The price level is P₀.The corresponding point on the aggregate demand curve is point A)A. B)B. C)C. D)D. E)E.

Question

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Point B represents the point of intersection between the AD and the SRAS curves, which corresponds to the initial equilibrium of desired aggregate expenditure equal to real GDP. Point A is to the left of this point, indicating that desired aggregate expenditure is less than real GDP, while points C, D, and E are to the right, indicating that desired aggregate expenditure is greater than real GDP. Therefore, point B is the corresponding point on the aggregate demand curve.