Exhibit 10-7 Aggregate supply and demand curves In Exhibit 10-7, the aggregate demand and supply curves reflect an economy in which: A)full employment is at $1,000 billion GDP. B)excess aggregate supply is created when there is a shift from AD₁ to AD₂. C)excess aggregate demand forces prices up to P = 120. D)excess aggregate demand causes prices to stabilize at P = 110. E)a new equilibrium is found at point b.

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The Answer of Exhibit 10-7 Aggregate supply and demand curves In Exhibit 10-7, the aggregate demand and supply curves reflect an economy in which: A)full employment is at $1,000 billion GDP. B)excess aggregate supply is created when there is a shift from AD₁ to AD₂. C)excess aggregate demand forces prices up to P = 120. D)excess aggregate demand causes prices to stabilize at P = 110. E)a new equilibrium is found at point b.

Exhibit 10-7 Aggregate Supply and Demand Curves in Exhibit