Exhibit: Shift in Aggregate Demand in This Graph, Initially

Multiple Choice

Exhibit: Shift in Aggregate Demand In this graph, initially the economy is at point E, with price P₀ and output Ȳ aggregate demand is given by curve AD₀, and SRAS and LRAS represent, respectively, short-run and long-run aggregate supply. Now assume that the aggregate demand curve shifts so that it is represented by AD₁. The economy moves first to point _____ and then, in the long run, to point _____.

A) A; D
B) D; A
C) C; B
D) B; C