Figure 15-3
-In Figure 15-3,if the economy is initially at equilibrium at point B,an unanticipated increase in aggregate demand from A D₁ to A D₂ would cause,in the short run,
A)the price level to rise from P₂ to P₁,real GDP to increase from Q₂ to Q₁,and the rate of unemployment to decrease.
B)the price level to move from P₂ to P₁,but real GDP would stay at Q₁.
C)the price level to rise by some amount less than P₁ but greater than P₂,and the rate of unemployment would decrease.
D)no change in either the price level or real GDP,but a decrease in unemployment.

Question

Figure 15-3 
-In Figure 15-3,if the economy is initially at equilibrium at point B,an unanticipated increase in aggregate demand from A D₁ to A D₂ would cause,in the short run,
A)the price level to rise from P₂ to P₁,real GDP to increase from Q₂ to Q₁,and the rate of unemployment to decrease. 
B)the price level to move from P₂ to P₁,but real GDP would stay at Q₁. 
C)the price level to rise by some amount less than P₁ but greater than P₂,and the rate of unemployment would decrease. 
D)no change in either the price level or real GDP,but a decrease in unemployment.

Quizplus · Accepted Answer

An unanticipated increase in aggregate demand would shift the AD curve from AD₁ to AD₂, causing an increase in both price level and real GDP. In the short run, companies would increase production to meet the higher demand, which would lead to an increase in employment and a decrease in the rate of unemployment. Therefore, option A is the correct answer. Option B is incorrect since the increase in aggregate demand would increase real GDP. Option C is incorrect since the increase in price level would be greater than P₂ but less than P₁. Option D is incorrect since there would be changes in price level and real GDP.

Figure 15-3 -In Figure 15-3,if the Economy Is Initially at Equilibrium at at Equilibrium