Multiple Choice
-The figure above illustrates the aggregate demand, short-run aggregate supply, and long-run aggregate supply in Lotus Land. The economy is currently at point D and the government decreases its taxes. The economy will move to_________ . The price level will_________ , and the change in real GDP will be_________ the increase in aggregate demand.
A) point B; remain constant; the same as
B) point C; rise; less than
C) point A; fall; less than
D) point D; rise; less than
Correct Answer:
Verified
Correct Answer:
Verified
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