-Refer to Figure 15-4.If the economy is currently at point X,an increase in output will A) move the economy to point A B) move the economy to point B C) shift the aggregate supply curve up to curve AS₂ D) shift the aggregate supply curve down to curve AS₃ E) have no effect on the price level and there will be no movement away from point X.

Question

Quizplus · Accepted Answer

An increase in output from point X would move the economy along the aggregate demand curve to a higher level of output at a higher price level, which is represented by moving to point B. This is because, in the context of an aggregate demand and aggregate supply diagram, increases in output typically move the economy up along the demand curve when other factors are held constant.