Figure 33-2. -Refer to Figure 33-2.Suppose the economy starts at Z.If changes occur that move the economy to a new short run equilibrium of P₁ and Y₁,then it must be the case that A) short run aggregate supply has decreased. B) short run aggregate supply has increased. C) aggregate demand has increased. D) aggregate demand has decreased.

Question

Quizplus · Accepted Answer

If the economy moves to a new short-run equilibrium with a lower price level (P1) and lower output (Y1), it indicates a decrease in aggregate demand.

Figure 33-2. -Refer to Figure 33-2.Suppose the Economy Starts at Z.If Changes