FIGURE 29-2 Refer to Figure 29-2

Multiple Choice

FIGURE 29-2 Refer to Figure 29-2.The movement of the economy from E₀ to E₁ was likely caused by a

A) positive demand shock associated with increased investment.
B) negative demand shock due to government cut-backs.
C) negative supply shock due to a rise in input prices.
D) positive supply shock induced by developments of new technology.
E) positive supply shock caused by lower nominal wages.