Refer to the following figure to answer the next questions.

-Based on the figure, if the economy starts at point A and ends up at point E, then in the short run, there was an)
A) decrease in aggregate demand.
B) increase in aggregate demand.
C) decrease in short-run aggregate supply.
D) increase in short-run aggregate supply.
E) increase in long-run aggregate supply.

Question

Refer to the following figure to answer the next questions.
 
-Based on the figure, if the economy starts at point A and ends up at point E, then in the short run, there was an)
A) decrease in aggregate demand. 
B) increase in aggregate demand. 
C) decrease in short-run aggregate supply. 
D) increase in short-run aggregate supply. 
E) increase in long-run aggregate supply.

Quizplus · Accepted Answer

Starting at point A and ending at point E, we can see that both output and price level have increased, indicating an increase in aggregate demand.

Refer to the Following Figure to Answer the Next Questions