Exhibit 10-8 Aggregate Demand and Supply in Exhibit 10-8

Multiple Choice

Exhibit 10-8 Aggregate demand and supply In Exhibit 10-8, if aggregate demand shifts from AD₂ to AD₁, real GDP will:

A) fall from $4.0 to $3.0, and the price level will fall from 120 to 100.
B) fall from $4.0 to $3.0, and the price level will not change.
C) fall from $7.0 to $4.0, and the price level will not change.
D) not change, and the price level will not change.
E) fall from $4.0 to $3.0, and the price level will fall from 170 to 100.