Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A) P1 and Y2.
B) P3 and Y1.
C) P2 and Y3.
D) P2 and Y2.

Name: Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be: A) P1 and Y2. B) P3 and Y1. C) P2 and Y3. D) P2 and Y2.
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Question

Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be: 
A) P1 and Y2. 
B) P3 and Y1. 
C) P2 and Y3. 
D) P2 and Y2.

Quizplus · Accepted Answer

If the aggregate demand curve shifts from AD2 to AD3, both price level and output will increase. Therefore, the new equilibrium point will be P2 and Y3.

Using Figure 1 Above, If the Aggregate Demand Curve Shifts