Figure 17-3 -Refer to Figure 17-3.Suppose the Economy Is at Point A.The

Multiple Choice

Figure 17-3

-Refer to Figure 17-3.Suppose the economy is at point a.The rational expectations hypothesis suggests that an increase in aggregate demand will result in the economy moving from ________ whereas new Keynesian economics suggests that it will move from _______.

A) point a to point d; point a to point b.
B) point a to point d; point a to point c.
C) point a to point b; point a to point d.
D) point a to point c; point a to point d.