12.2 Equilibrium in Aggregate Demand and Supply Analysis

Multiple Choice

12.2 Equilibrium in Aggregate Demand and Supply Analysis
AD - AS Equilibrium
-On the graph above,consider a point A on the aggregate demand curve and above the aggregate supply curve.At this point,________.

A) quantity demanded equals output,but the inflation rate will fall,so output will rise
B) quantity demanded is greater than quantity supplied,so the inflation rate will rise
C) output is greater than the quantity demanded,so output will fall
D) the aggregate demand curve will shift to the right until quantity demanded is equal to quantity supplied
E) none of the above