Figure 14-1
-Refer to Figure 14-1. If the economy is at C and there is an increase in aggregate demand, what happens to the economy in the short run?
A) It stays at A.
B) It moves to B.
C) It moves to C.
D) It moves to D.

Question

Figure 14-1 
-Refer to Figure 14-1. If the economy is at C and there is an increase in aggregate demand, what happens to the economy in the short run?
A) It stays at A. 
B) It moves to B. 
C) It moves to C. 
D) It moves to D.

Quizplus · Accepted Answer

An increase in aggregate demand will shift the aggregate demand curve to the right, causing the economy to move from point C to point B in the short run.

Figure 14-1 -Refer to Figure 14-1. If the Economy Is at C