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Refer to the Graph Above

Question 107

Multiple Choice

Refer to the graph above. Assume the economy is at the initial position of B<sub>2</sub>. An increase in aggregate demand with no corresponding change in inflation expectations and wage rates will tend to: A) Temporarily move the economy to point B<sub>3</sub> B) Temporarily move the economy to point C<sub>2</sub> C) Temporarily move the economy to point C<sub>1</sub> D) Have no effect in shifting the economy from point B<sub>2</sub> Refer to the graph above. Assume the economy is at the initial position of B2. An increase in aggregate demand with no corresponding change in inflation expectations and wage rates will tend to:


A) Temporarily move the economy to point B3
B) Temporarily move the economy to point C2
C) Temporarily move the economy to point C1
D) Have no effect in shifting the economy from point B2

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