According to the figure of ADAS curves and assuming the country begins on AD1 and SRAS1, what will happen in the short and long run if the government begins a sustained period of increased spending?
A) The economy moves from point C to E to B.
B) The economy moves from point D to C to A.
C) The economy moves from point D to C to E.
D) The economy moves from point C to A to B.
Correct Answer:
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