Figure 11.3: -Using Figure 11.3,a shift in aggregate demand from AD₂ to AD₁,ceteris paribus,is most likely to cause: A) An increase in real output and an increase in the price level. B) An increase in real output and a decrease in the price level. C) A decrease in real output and an increase in the price level. D) A decrease in real output and a decrease in the price level.

Question

Quizplus · Accepted Answer

A leftward shift in aggregate demand from AD2 to AD1 typically leads to a decrease in both real output and the price level, assuming all other factors remain constant.

Figure 11.3: -Using Figure 11.3,a Shift in Aggregate Demand from AD2 to from AD2

Figure 11.3: -Using Figure 11.3,a Shift in Aggregate Demand from AD₂ to from AD₂