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Refer to the Graph Above

Question 30

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Refer to the graph above. Assume that the economy is in initial equilibrium where AD<sub>1</sub> intersects AS<sub>1</sub>. If there is an unanticipated increase in aggregate demand and the economy self-corrects, then the adaptive-expectations adjustment path would go from point: A) A directly to B B) A to B to C C) B to A to D D) A to B to C to D Refer to the graph above. Assume that the economy is in initial equilibrium where AD1 intersects AS1. If there is an unanticipated increase in aggregate demand and the economy self-corrects, then the adaptive-expectations adjustment path would go from point:


A) A directly to B
B) A to B to C
C) B to A to D
D) A to B to C to D

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