Figure 7-5

-In Figure 7-5 above,from point A suppose the shift in aggregate demand is due to a 6 percent rise in the money supply.Suppose that at the same time the nominal wage also rises by 6 percent.We would move from points A to
A)B.
B)C.
C)D.
D)E.
E)F.

Question

Figure 7-5
 
-In Figure 7-5 above,from point A suppose the shift in aggregate demand is due to a 6 percent rise in the money supply.Suppose that at the same time the nominal wage also rises by 6 percent.We would move from points A to
A)B. 
B)C. 
C)D. 
D)E. 
E)F.

Quizplus · Accepted Answer

Moving from point A to D reflects a scenario where both the money supply and nominal wages increase by the same percentage. This leads to a shift in the aggregate demand curve without a change in the aggregate supply curve, resulting in a higher price level and unchanged output, which is represented by moving vertically upwards from A to D in the typical AD-AS model.

Figure 7-5 -In Figure 7-5 Above,from Point a Suppose the Shift in Suppose