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Refer to the Accompanying Figure

Question 51

Multiple Choice

Refer to the accompanying figure. Refer to the accompanying figure. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD¹ to AD 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; C D) A; B Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD¹ to AD 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; C
D) A; B

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