-The figure above shows the aggregate demand,short-run aggregate supply,and long-run aggregate supply curves for the U.S.economy.The economy is currently at point A.A demand-pull rise in the price level will initially move the economy to point ________ and to point ________.
A) E when aggregate demand increases; D when the wage rate rises
B) B when aggregate demand decreases; C when the wage rate rises
C) E; A when aggregate demand changes
D) C when the wage rate rises; D when aggregate demand increases

Question

-The figure above shows the aggregate demand,short-run aggregate supply,and long-run aggregate supply curves for the U.S.economy.The economy is currently at point A.A demand-pull rise in the price level will initially move the economy to point ________ and to point ________.
A) E when aggregate demand increases; D when the wage rate rises 
B) B when aggregate demand decreases; C when the wage rate rises 
C) E; A when aggregate demand changes 
D) C when the wage rate rises; D when aggregate demand increases

Quizplus · Accepted Answer

A demand-pull rise in the price level occurs when aggregate demand increases, initially moving the economy to point E. As the wage rate rises in response to higher prices, the economy moves to point D.

-The Figure Above Shows the Aggregate Demand,short-Run Aggregate Supply,and Long-Run