Multiple Choice
Refer to the above diagram.The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1.In the long run, demand-pull inflation is best shown as:
A) a shift of aggregate demand from AD1 to AD2 followed by a shift of aggregate supply from AS1 to AS2.
B) a move from d to b to a.
C) a shift of aggregate supply from AS1 to AS2 followed by a shift of aggregate demand from AD1 to AD2.
D) a move from a to d.
Correct Answer:
Verified
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