Refer to the graph. Assume that the economy is initially at equilibrium at point A. If there is a recession in the economy because AD
$A D _ { 1 } \text { shifts to } A D _ { 2 } \text {, }$ , and wages and prices are ?exible, then in the
Long run the price level will be
A) $P _ { 2 } \text { and real output will be } Q _ { f } \text {. }$
B) $P _ { 3 } \text { and real output will be } Q _ { f } \text {. }$
C) $P _ { 1 } \text { and real output will be } Q _ { f } \text {. }$
D) P2 and real output will be Q1.

Question

Refer to the graph. Assume that the economy is initially at equilibrium at point A. If there is a recession in the economy because AD
$A D _ { 1 } \text { shifts to } A D _ { 2 } \text {, }$ , and wages and prices are ?exible, then in the
Long run the price level will be
A) $P _ { 2 } \text { and real output will be } Q _ { f } \text {. }$ 
B) $P _ { 3 } \text { and real output will be } Q _ { f } \text {. }$ 
C) $P _ { 1 } \text { and real output will be } Q _ { f } \text {. }$ 
D) P2 and real output will be Q1.

Quizplus · Accepted Answer

The Answer of  Refer to the graph. Assume that the economy is initially at equilibrium at point A. If there is a recession in the economy because AD
$A D _ { 1 } \text { shifts to } A D _ { 2 } \text {, }$ , and wages and prices are ?exible, then in the
Long run the price level will be
A) $P _ { 2 } \text { and real output will be } Q _ { f } \text {. }$ 
B) $P _ { 3 } \text { and real output will be } Q _ { f } \text {. }$ 
C) $P _ { 1 } \text { and real output will be } Q _ { f } \text {. }$ 
D) P2 and real output will be Q1.

Refer to the Graph AD1 shifts to AD2, A D _ { 1 } \text { shifts to } A D _ { 2 } \text {, }AD1​ shifts to AD2​,

Refer to the Graph $A D _ { 1 } \text { shifts to } A D _ { 2 } \text {, }$