Suppose the Economy Begins in a Long-Run Equilibrium with Y

Multiple Choice

Suppose the economy begins in a long-run equilibrium with Y = Y*.A permanent increase in aggregate demand will have its short-run effect on real GDP reversed in the long run with a ________ shift of ________.

A) rightward; the aggregate supply curve
B) rightward; the aggregate demand curve
C) leftward; the aggregate supply curve
D) leftward; the aggregate demand curve
E) rightward; Y*