Multiple Choice
Figure 15-3
-As shown in Figure 15-3,if people behave according to rational expectations theory,an increase in the aggregate demand curve from AD₁ to AD₂ will cause the economy to move
A) directly from E₁ to E₃ and then remain at E₃.
B) directly from E₁ to E₂ and then remain at E₂.
C) from E₁ to E₂ initially and then eventually move back to E₁.
D) from E₁ to E₂ initially and then eventually move to E₃.
Correct Answer:
Verified
Correct Answer:
Verified
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