For the following question(s),assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below.
Figure 10-19

-Refer to Figure 10-19.Consumers and businesses all suddenly decide that the future looks much better than it previously had.
A)The aggregate demand curve would shift to the right.
B)The aggregate demand curve would shift to the left.
C)The short-run aggregate supply curve would shift to the right.
D)The short-run aggregate supply curve would shift to the left.

Question

For the following question(s),assume that the economy is in long-run equilibrium in the aggregate demand/aggregate supply model and that some sort of event takes place.In each case,mark the most likely impact of the event on the aggregate demand/aggregate supply diagram given below.
Figure 10-19
 
-Refer to Figure 10-19.Consumers and businesses all suddenly decide that the future looks much better than it previously had.
A)The aggregate demand curve would shift to the right. 
B)The aggregate demand curve would shift to the left. 
C)The short-run aggregate supply curve would shift to the right. 
D)The short-run aggregate supply curve would shift to the left.

Quizplus · Accepted Answer

If consumers and businesses suddenly become more optimistic about the future, it is likely that they will increase their spending and investment, which will increase the overall demand for goods and services. This will cause the aggregate demand curve to shift to the right.

For the Following Question(s),assume That the Economy Is in Long-Run