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-Suppose the Economy Is at Point B

Question 2

Multiple Choice

-Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy's move in the short run? A) It stays at point B. B) It shifts to a point such as A. C) It shifts to a point such as C. D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.
-Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy's move in the short run?


A) It stays at point B.
B) It shifts to a point such as A.
C) It shifts to a point such as C.
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

Correct Answer:

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