Refer to the following figure to answer the next five questions.

-Based on the figure,if the economy starts at point A and ends up at point E,then in the short run,there was:
A) a decrease in aggregate demand.
B) an increase in aggregate demand.
C) a decrease in short-run aggregate supply.
D) an increase in short-run aggregate supply.
E) an increase in long-run aggregate supply.

Question

Refer to the following figure to answer the next five questions.
 
-Based on the figure,if the economy starts at point A and ends up at point E,then in the short run,there was:
A) a decrease in aggregate demand. 
B) an increase in aggregate demand. 
C) a decrease in short-run aggregate supply. 
D) an increase in short-run aggregate supply. 
E) an increase in long-run aggregate supply.

Quizplus · Accepted Answer

If the economy moves from point A to point E, it indicates an increase in aggregate demand, as this would typically result in a higher output and price level in the short run.

Refer to the Following Figure to Answer the Next Five