Refer to the figure above. If AD 1 shifts to AD 2 , then the equilibrium output:
ID: 1090692 • Letter: R
Question
Refer to the figure above. If AD1 shifts to AD2, then the equilibrium output:
Increases from Q1 to Q3 while the price level falls from P2 to P1
Increases from Q1 to Q2 while the price level falls from P2 to P1
Increases from Q1 to Q3 while the price level rises from P1 to P2
Increases from Q1 to Q2 while the price level rises from P1 to P2
Refer to the figure above. If aggregate demand curve shifts from AD2 to AD1, the full multiplier effect on real GDP will be a decrease from:
Q3 to Q1
Q2 to Q4
Q2 to Q1
Q3 to Q4
Refer to the figure above. If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:
Cost-push inflation, and the new equilibrium output will be less than Q2
Demand-pull inflation, and the new equilibrium output will be less than Q2
Demand-pull inflation, and the new equilibrium output will be more than Q2
Cost-push inflation, and the new equilibrium output will be more than Q2
Increases from Q1 to Q3 while the price level falls from P2 to P1
Increases from Q1 to Q2 while the price level falls from P2 to P1
Increases from Q1 to Q3 while the price level rises from P1 to P2
Increases from Q1 to Q2 while the price level rises from P1 to P2
AD1 AD2 AS 0 2 Q Real Domestic OutputExplanation / Answer
Increases from Q1 to Q2 while the price level rises from P1 to P2
Q2 to Q1
Cost-push inflation, and the new equilibrium output will be more than Q2