Exhibit 17-4
-If the economy in Exhibit 17-4 is initially at point c and aggregate demand is stable, the economy will
A)move toward point a
B)move toward point b
C)stay at point c
D)move toward point d
E)move toward point f

Question

Exhibit 17-4 
-If the economy in Exhibit 17-4 is initially at point c and aggregate demand is stable, the economy will
A)move toward point a 
B)move toward point b 
C)stay at point c 
D)move toward point d 
E)move toward point f

Quizplus · Accepted Answer

If the aggregate demand is stable, the economy will stay at point c as there will be no movement in the short run aggregate supply curve.

Exhibit 17-4 -If the Economy in Exhibit 17-4 Is Initially at Point