Exhibit 14A-1 Aggregate demand and supply model As shown in Exhibit 14A-1, the economy's point of short-run equilibrium, given by the shift of the aggregate demand curve from AD₁ to AD₂ , is: A) E₁. B) E₂. C) E₃. D) unable to be determined.

Question

Quizplus · Accepted Answer

The new short-run equilibrium is given by the intersection of the new aggregate demand curve (ADS1U1B12S1U1B0) and the existing short-run aggregate supply curve (S1U1B0), which is point ES1U1B12S1U1B0.

Exhibit 14A-1 Aggregate Demand and Supply Model as Shown in Exhibit