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-In the Above Figure, If Initial Equilibrium Is at Point

Question 55

Multiple Choice

-In the above figure, if initial equilibrium is at point A and if there is an unanticipated increase in aggregate demand from AD₁ to AD₂, then A) in the short run real output will remain at Y₁. B) in the short run real output will increase above Y₁, but in the long run it will return to Y₁. C) in the long run real output will increase above Y₁. D) real output will increase above Y₁ in both the short run and in the long run.
-In the above figure, if initial equilibrium is at point A and if there is an unanticipated increase in aggregate demand from AD₁ to AD₂, then


A) in the short run real output will remain at Y₁.
B) in the short run real output will increase above Y₁, but in the long run it will return to Y₁.
C) in the long run real output will increase above Y₁.
D) real output will increase above Y₁ in both the short run and in the long run.

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