1. Refer to the figure below. An increase in interest rate would cause: Price level, P B AD AD AD₂ Aggregate output, Y A) the aggregate demand curve to shift from AD₁ to AD₂ B) the economy to move from Point A to Point B C) the aggregate demand curve to shift from AD₁ to ADo D) neither a shift of the aggregate demand curve nor a change in real GDP

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter26: The Neoclassical Perspective
Section: Chapter Questions
Problem 21P: Use Table 26.3 to answer the following questions. Sketch an aggregate supply and aggregate demand...
Question
1. Refer to the figure below. An increase in interest rate would cause:
Price level, P
B
AD
AD
AD₂
Aggregate output, Y
A) the aggregate demand curve to shift from AD₁ to AD₂
B) the economy to move from Point A to Point B
C) the aggregate demand curve to shift from AD₁ to ADo
D) neither a shift of the aggregate demand curve nor a change in real GDP
Transcribed Image Text:1. Refer to the figure below. An increase in interest rate would cause: Price level, P B AD AD AD₂ Aggregate output, Y A) the aggregate demand curve to shift from AD₁ to AD₂ B) the economy to move from Point A to Point B C) the aggregate demand curve to shift from AD₁ to ADo D) neither a shift of the aggregate demand curve nor a change in real GDP
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