Refer to the following figure when answering
Figure 15.3: The Labor Market
-In the stylized DSGE model for the labor market displayed in Figure 15.3, with sticky prices, the Fed's desire to expand the economy would move the labor market from:
A) $a \rightarrow b$
B) $a \rightarrow d$
C) $a \rightarrow c$
D) $c \rightarrow a$
E) $d \rightarrow b$

Question

Refer to the following figure when answering  
Figure 15.3: The Labor Market 
-In the stylized DSGE model for the labor market displayed in Figure 15.3, with sticky prices, the Fed's desire to expand the economy would move the labor market from:
A) $a \rightarrow b$ 
B) $a \rightarrow d$ 
C) $a \rightarrow c$ 
D) $c \rightarrow a$ 
E) $d \rightarrow b$

Quizplus · Accepted Answer

The Fed's desire to expand the economy would lead to an increase in aggregate demand, which would shift the labor demand curve to the right, moving the labor market from point a to point b.

Refer to the Following Figure When Answering Figure a→ba \rightarrow ba→b

Refer to the Following Figure When Answering
Figure $a \rightarrow b$