Refer to the information provided in Figure 29.2 below to answer the question(s) that follow. Figure 29.2
-Refer to Figure 29.2. The price will fall if the economy is currently at Point ________ and policy makers implement a policy which decreases the aggregate demand curve to ________.

Question

Refer to the information provided in Figure 29.2 below to answer the question(s) that follow.

Figure 29.2
-Refer to Figure 29.2. The price will fall if the economy is currently at Point ________ and policy makers implement a policy which decreases the aggregate demand curve to ________.

Quizplus · Accepted Answer

According to the graph, the price level will fall from P1 to P0 if aggregate demand curve shifts leftward from AD_{1 to AD} when the economy is currently at Point B. Therefore, choice C is the correct answer.

Refer to the Information Provided in Figure 29