Figure 18-1
-Refer to Figure 18-1.Europe suffers a recession.Assuming all else remains constant,this would be represented as a movement from
A)D to A.
B)C to D.
C)B to C.
D)A to D.
E)A to B.

Question

Figure 18-1 
-Refer to Figure 18-1.Europe suffers a recession.Assuming all else remains constant,this would be represented as a movement from
A)D to A. 
B)C to D. 
C)B to C. 
D)A to D. 
E)A to B.

Quizplus · Accepted Answer

A recession in Europe would result in a decrease in demand for goods and services, which would cause a leftward shift of the aggregate demand curve from AD to AD'. This results in a decrease in both real GDP and price level, causing a movement along the aggregate supply curve from point C to point D. Therefore, the correct answer is B, representing the movement from C to D.

Figure 18-1 -Refer to Figure 18-1.Europe Suffers a Recession.Assuming All Else Remains