Refer to the following figure when answering the following questions.
Figure 13.1: AD Curve
-Consider Figure 13.1. If Europe goes into a recession and inflation remains constant, the economy would move from point e to point:
A) g.
B) a.
C) c.
D) b.
E) c

Question

Refer to the following figure when answering the following questions.
Figure 13.1: AD Curve 
-Consider Figure 13.1. If Europe goes into a recession and inflation remains constant, the economy would move from point e to point:
A) g. 
B) a. 
C) c. 
D) b. 
E) c

Quizplus · Accepted Answer

A recession in Europe would lead to a decrease in demand for goods and services, causing a decrease in aggregate demand (AD). This would shift the AD curve to the left, causing a decrease in output and a decrease in price level. Point g represents a lower level of output and price level compared to point e, making it the correct choice.

Refer to the Following Figure When Answering the Following Questions