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Refer to the Diagram

Question 22

Multiple Choice

Refer to the diagram. Rational expectations theory says that a fully anticipated shift in aggregate demand from AD<sub>1</sub> to AD<sub>2</sub> will A) move the economy from a to b to c. B) move the economy directly from a to c. C) move the economy from a to a new equilibrium at b. D) shift the AS curve to the right.
Refer to the diagram. Rational expectations theory says that a fully anticipated shift in aggregate demand from AD1 to AD2 will


A) move the economy from a to b to c.
B) move the economy directly from a to c.
C) move the economy from a to a new equilibrium at b.
D) shift the AS curve to the right.

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