Refer to the information provided in Figure 13.2 below to answer the questions that follow.
Figure 13.2
-Refer to Figure 13.2.Firms respond to an increase in government spending by mostly raising their prices when the aggregate demand curve shifts from

Question

Refer to the information provided in Figure 13.2 below to answer the questions that follow.

Figure 13.2
-Refer to Figure 13.2.Firms respond to an increase in government spending by mostly raising their prices when the aggregate demand curve shifts from

Quizplus · Accepted Answer

When the aggregate demand curve shifts from AD₅ to AD₆, it is likely that the economy is operating near or at full capacity, leading firms to raise prices rather than increase output significantly.

Refer to the Information Provided in Figure 13