-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A
Demand-pull rise in the price level will initially move the economy to point ___________and to point___________
A) E; A when aggregate demand changes
B) E when aggregate demand increases; D when the wage rate rises
C) C when the wage rate rises; D when aggregate demand increases
D) B when aggregate demand decreases; C when the wage rate rises

Question

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A
Demand-pull rise in the price level will initially move the economy to point ___________and to point___________ 
A) E; A when aggregate demand changes 
B) E when aggregate demand increases; D when the wage rate rises 
C) C when the wage rate rises; D when aggregate demand increases 
D) B when aggregate demand decreases; C when the wage rate rises

Quizplus · Accepted Answer

A demand-pull rise in the price level occurs when aggregate demand increases, initially moving the economy to point E. Over time, as the wage rate rises, the economy will move to point D.

-The Figure Above Shows the Aggregate Demand, Short-Run Aggregate Supply