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Refer to the Accompanying Figure

Question 94

Multiple Choice

Refer to the accompanying figure. Refer to the accompanying figure. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. A) D; B B) D; C C) B; A D) B; C Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.


A) D; B
B) D; C
C) B; A
D) B; C

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