Exhibit 16-2

-Refer to Exhibit 16-2.Suppose the economy starts out at point A and the public correctly anticipates that the AD curve will shift from AD₁ to AD₂.If wages are temporarily fixed,SRAS₁ will __________ and the economy will end up at point __________.

Question

Exhibit 16-2
Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts out at point A and the public correctly anticipates that the AD curve will shift from AD1 to AD2.If wages are temporarily fixed,SRAS1 will __________ and the economy will end up at point __________. A) shift; D B) shift; B C) not shift; D D) not shift; E

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the economy starts out at point A and the public correctly anticipates that the AD curve will shift from AD<sub>1</sub> to AD<sub>2</sub>.If wages are temporarily fixed,SRAS<sub>1</sub> will __________ and the economy will end up at point __________. A) shift; D B) shift; B C) not shift; D D) not shift; E

-Refer to Exhibit 16-2.Suppose the economy starts out at point A and the public correctly anticipates that the AD curve will shift from AD₁ to AD₂.If wages are temporarily fixed,SRAS₁ will __________ and the economy will end up at point __________.

Quizplus · Accepted Answer

If wages are temporarily fixed, the SRAS curve will not shift, and the economy will move along the SRAS curve to the new equilibrium point D where the AD curve intersects the SRAS curve.

Exhibit 16-2 -Refer to Exhibit 16-2.Suppose the Economy Starts Out at Point