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Refer to the Above Graph

Question 73

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Refer to the above graph. Assume that the economy is in initial equilibrium where AD<sub>1</sub> intersects AS<sub>1</sub>. If there is a decrease in aggregate demand to AD<sub>2</sub>, then according to mainstream economists, if prices and wages are not flexible, this will result in an equilibrium at point: A) E B) B C) C D) D Refer to the above graph. Assume that the economy is in initial equilibrium where AD1 intersects AS1. If there is a decrease in aggregate demand to AD2, then according to mainstream economists, if prices and wages are not flexible, this will result in an equilibrium at point:


A) E
B) B
C) C
D) D

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