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Based on the Figure Below

Question 33

Multiple Choice

Based on the figure below. 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. Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD<sup>1</sup> 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


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

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