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Refer to the Graph AD1A D _ { 1 } Intersects A

Question 159

Multiple Choice

Refer to the graph. Assume that the economy is in initial equilibrium where AD A D _ { 1 } intersects A A S _ { 1 }. . If There is an anticipated decrease in aggregate demand to AD A D _ { 2 } , then, according to rational Expectations theory, the path for adjustment runs from point A) A to B to C. B) A to D to C. C) A directly to C. D) A directly to D. Refer to the graph. Assume that the economy is in initial equilibrium where AD AD1A D _ { 1 } intersects A
AS1.A S _ { 1 }. . If
There is an anticipated decrease in aggregate demand to AD
AD2A D _ { 2 } , then, according to rational
Expectations theory, the path for adjustment runs from point


A) A to B to C.
B) A to D to C.
C) A directly to C.
D) A directly to D.

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