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Beginning from Short-Run Equilibrium at Point E2 in Exhibit 1

Question 71

Multiple Choice

Beginning from short-run equilibrium at point E2 in Exhibit 1, the economy's movement to a new position of long-run equilibrium would best be described as:


A) a movement along the AD2 curve with a shift in the SRAS1 curve.
B) a movement along the SRAS2 curve with a shift in the AD2 curve.
C) a shift in the LRAS curve to an intersection at E1.
D) no shift of any kind.

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