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From an Initial AD/SAS/LAS Equilibrium with Price and Wage Index

Question 81

Multiple Choice

From an initial AD/SAS/LAS equilibrium with price and wage index numbers of 1.00 and an output index number of 100,suppose a new SAS curve must be drawn for a wage level of 1.03.Applying a general rule for drawing SAS curves,it goes through the


A) current AD curve at Y = 103.
B) current AD curve at P = 1.03.
C) LAS curve at Y = 103.
D) LAS curve at P = 1.03.

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