-The Figure Above Shows the Aggregate Demand, Short-Run Aggregate Supply

Multiple Choice

-The figure above shows the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves for the U.S. economy. The economy is currently at point A. A demand-pull rise in the price level will initially move the economy to point ________ and to point ________.

A) E when aggregate demand increases; D when the wage rate rises
B) B when aggregate demand decreases; C when the wage rate rises
C) E when aggregate demand increases; A when the wage rate rises
D) C when the wage rate rises; D when aggregate demand increases