-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

An aggregate demand shock is a sudden change in the overall demand for goods and services in an economy. This can be caused by a number of factors, such as a change in consumer spending, investment, or government spending. In the figure, an aggregate demand shock would cause the AD curve to shift to the right, from AD1 to AD2. This would lead to an increase in output and a decrease in unemployment.

-In the Above Figure, the Economy Would Most Likely Move