Figure 33-8. -Refer to Figure 33-8.Suppose the economy starts at Z.If changes occur that move the economy to a new short run equilibrium of P₁ and Y₁ ,then it must be the case that A)short run aggregate supply has decreased. B)short run aggregate supply has increased. C)aggregate demand has increased. D)aggregate demand has decreased.

Question

Quizplus · Accepted Answer

If the economy moves to a new short-run equilibrium with a lower price level (P1) and lower output (Y1), it indicates a decrease in aggregate demand.

Figure 33-8. -Refer to Figure 33-8.Suppose the Economy Starts at Z.If Changes