-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________.
A)c;a
B)c;b
C)b;a
D)a;b
E)Not enough information is given.

Question

-Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario.The terrorist attacks on 9/11 caused the economy initially to move from point __________ to point __________.
A)c;a 
B)c;b 
C)b;a 
D)a;b 
E)Not enough information is given.

Quizplus · Accepted Answer

The terrorist attacks on 9/11 caused a negative demand shock, leading the economy to move from a higher output and price level (point b) to a lower output and price level (point a) on the aggregate supply/aggregate demand model.

-Use the Aggregate Supply/aggregate Demand Model in Figure 13