Exhibit 14-2 Aggregate Demand and Supply

Multiple Choice

Exhibit 14-2 Aggregate demand and supply

-In Exhibit 14-2,if aggregate demand shifts from AD₁ to AD₃,real GDP will:

A) increase from $3 to $4 and the price level will increase from 100 to 140.
B) increase from $3 to $7 and the price level will increase from 100 to 140.
C) increase from $3 to $4 and the price level does not change.
D) increase from $3 to $7 and the price level will increase from 100 to 120.
E) not change and the price level will increase from 100 to 140.