Exhibit 16-4
-Consider Exhibit 16-4.If the economy is initially at point c and aggregate demand increases,the economy will (in the long run)
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 16-4 
-Consider Exhibit 16-4.If the economy is initially at point c and aggregate demand increases,the economy will (in the long run)
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

In the long run, if aggregate demand increases, the economy will move toward point a, which represents a higher price level and full employment output, as the economy adjusts to the new demand level.

Exhibit 16-4 -Consider Exhibit 16-4.If the Economy Is Initially at Point C