Refer to the diagram given below. When the real output increases from Q1 and the price level decreases from P1, there should have been a:
A) shift of the aggregate supply curve from AS1 to AS2.
B) shift of the aggregate supply curve from AS1 to AS3.
C) movement along the aggregate demand curve from e1 to e2.
D) movement along the aggregate demand curve from e3 to e1.
Correct Answer:
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