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Exhibit 5-3 -In Exhibit 5-3 AD1 and AS1 Represent the Initial Aggregate

Question 44

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Exhibit 5-3 Exhibit 5-3 -In Exhibit 5-3 AD<sub>1</sub> and AS<sub>1</sub> represent the initial aggregate demand and aggregate supply.The initial equilibrium is at point A.Suppose that the price level in Europe falls,what will the new equilibrium be? A) P<sub>2</sub> and GDP<sub>1</sub> B) P<sub>3</sub> and GDP<sub>6</sub> C) P<sub>6</sub> and GDP<sub>5</sub> D) P<sub>4</sub> and GDP<sub>3</sub> E) P<sub>5</sub> and GDP<sub>2</sub>
-In Exhibit 5-3 AD1 and AS1 represent the initial aggregate demand and aggregate supply.The initial equilibrium is at point A.Suppose that the price level in Europe falls,what will the new equilibrium be?


A) P2 and GDP1
B) P3 and GDP6
C) P6 and GDP5
D) P4 and GDP3
E) P5 and GDP2

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