In the above figure, the economy would most likely move from AD₁ to AD₂ because of
A)an aggregate supply shock.
B)an aggregate demand shock.
C)a recession.
D)a depression.

Question

Quizplus · Accepted Answer

The economy would most likely move from AD₁ to AD₂ due to an aggregate demand shock, meaning there has been a shift in consumer behavior or government policy resulting in changes in aggregate demand. This shift could be caused by changes in factors such as consumer confidence, inflation, and interest rates.

In the Above Figure, the Economy Would Most Likely Move