Figure 15-4
-In Figure 15-4,if A is the initial equilibrium point and there is an unanticipated rise in aggregate demand from A D₁ to A D₂,then
A)the new short run equilibrium will be at point B.
B)the new long run equilibrium will be at point B.
C)the new short run equilibrium will be at point D.
D)real GDP per year will fall below Q₁.

Question

Figure 15-4 
-In Figure 15-4,if A is the initial equilibrium point and there is an unanticipated rise in aggregate demand from A D₁ to A D₂,then
A)the new short run equilibrium will be at point B. 
B)the new long run equilibrium will be at point B. 
C)the new short run equilibrium will be at point D. 
D)real GDP per year will fall below Q₁.

Quizplus · Accepted Answer

In the scenario described, an unanticipated rise in aggregate demand from AD1 to AD2 would initially move the economy to a new short-run equilibrium point where the aggregate demand curve intersects the short-run aggregate supply curve. This is typically represented by a point like B on such graphs, indicating a higher level of output and price level than at the initial equilibrium A. The long-run equilibrium might adjust differently due to changes in aggregate supply or further adjustments in demand, but the immediate effect of increased aggregate demand is to move the economy to a higher output and price level in the short run.

Figure 15-4 -In Figure 15-4,if a Is the Initial Equilibrium Point and Equilibrium