Figure 33-8.
-Refer to Figure 33-8. Suppose the economy starts at Z. If changes occur that move the economy to a new short run equilibrium of P1 and Y1 , then it must be the case that

Question

Figure 33-8. 
-Refer to Figure 33-8. Suppose the economy starts at Z. If changes occur that move the economy to a new short run equilibrium of P1 and Y1 , then it must be the case that

Quizplus · Accepted Answer

If the economy moves to a new short-run equilibrium with a lower price level (P1) and lower output (Y1), it indicates that aggregate demand has decreased.

Figure 33-8. -Refer to Figure 33-8. Suppose the Economy Starts at Z