Refer to the following figure when answering the following questions.
Figure 13.1: AD Curve
-Consider Figure 13.1, beginning at point e. If there is a change in the inflation rate:
A) there is movement along the AD curve to point b.
B) the AD curve shifts right to point a.
C) the AD curve shifts left to point g.
D) there is movement along the AD curve to point d.
E) Not enough information is given.

Question

Refer to the following figure when answering the following questions.
Figure 13.1: AD Curve 
-Consider Figure 13.1, beginning at point e. If there is a change in the inflation rate:
A) there is movement along the AD curve to point b. 
B) the AD curve shifts right to point a. 
C) the AD curve shifts left to point g. 
D) there is movement along the AD curve to point d. 
E) Not enough information is given.

Quizplus · Accepted Answer

Changes in the inflation rate affect the position of the AD curve rather than causing movement along the curve. Without specific details on how the inflation rate changes (increases or decreases) and how it impacts aggregate demand directly, it's not possible to determine the direction of the shift or movement.

Refer to the Following Figure When Answering the Following Questions