Exhibit 16-5
-If the economy in Exhibit 16-5 is initially at point c and aggregate demand is stable,the economy will
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 16-5 
-If the economy in Exhibit 16-5 is initially at point c and aggregate demand is stable,the economy will
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

If aggregate demand is stable, the economy will remain at point c since there is no external force driving it towards any other point. Points a, b, d, and f are only reached if there is a shift in aggregate demand or aggregate supply.

Exhibit 16-5 -If the Economy in Exhibit 16-5 Is Initially at Point