Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario. The terrorist attacks on 9/11 caused the economy initially to move from point ________ to point ________; eventually the economy returned to the steady state at point ________.
A) c; a; b
B) c; b; a
C) c; d; c
D) a; b; c
E) Not enough information is given.

Question

Quizplus · Accepted Answer

The terrorist attacks caused a short-term decrease in aggregate demand, moving the economy from point c to point d. Over time, the economy adjusted back to its original steady state at point c.

Use the Aggregate Supply/aggregate Demand Model in Figure 13