Suppose the Economy Begins in a Long- Run Equilibrium with Y

Multiple Choice

Suppose the economy begins in a long- run equilibrium with Y = Y*. A permanent increase in aggregate demand will have its short- run effect on real GDP reversed in the long run with a shift of _ .

A) leftward; the aggregate demand curve
B) rightward; the aggregate demand curve
C) leftward; the aggregate supply curve
D) rightward; the aggregate supply curve
E) rightward; Y*