The figure shown displays various economic outcomes. If the aggregate demand curve shifts from AD₃ to AD₂, the resulting price and output in the long run would be: A) P ₁ and Y ₂. B) P ₃ and Y ₂. C) P ₂ and Y ₁. D) P ₃ and Y ₁.

Question

Quizplus · Accepted Answer

When the aggregate demand curve shifts from AD₃ to AD₂, the equilibrium point moves from point A to point B. At point B, the long-run aggregate supply curve intersects with the new aggregate demand curve at a higher price level, leading to a higher equilibrium price level (₃) and the same output level as before (₂). Therefore, the correct choice is B.

The Figure Shown Displays Various Economic Outcomes