-According to Figure 11.2,a shift from AD₁ to AD₂ will

Question

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A shift from AD₁ to AD₂ shows an increase in the price level, which will cause a movement along the AD curve to a new equilibrium point with a lower quantity of output and a higher price level (point Y). This will result in higher inflation and a decrease in real GDP. It will not eliminate the GDP gap or move the economy to point Z as there is no information on the movement of the AS curve.