The Aggregate Demand Aggregate Supply Model Mcqs


Q.  Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ?

a. People will reduce their price expectations and the short run aggregate supply will shift right
b. People will raise their price expectations and aggregate demand will shift left
c. People will raise their price expectations and the short run aggregate supply will shift left
d. People will reduce their price expectations and aggregate demand will shift right


ANSWER: See Answer
 
No explanation is available for this question!
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