Multiple Choice
Use the following to answer questions .
Exhibit: Short-run Aggregate Supply 
-(Exhibit: Short-run Aggregate Supply) Suppose that the economy is in long-run equilibrium at point A. Now suppose net exports increase. What happens in the short run?
A) There will be an increase in aggregate output demanded and the economy moves from point A to point G.
B) Real GDP increases to Y2 and the price level rises to P2.
C) Real GDP decreases to Y3 and the price level falls to P3.
D) Since the economy is already at its potential output, only the price level will rise to P2.
Correct Answer:
Verified
Correct Answer:
Verified
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