Referring to the diagram above, complete the following sentence: Any increase in aggregate demand in the short-run will lead to:
A. an increase in output (Q1 to Q2), but it will also lead to prices increasing.
B. an increase in output (Q1 to Q2), but it will also lead to a recession.
C. a 45 degree supply curve, which will lead to increasing unemployment.
D. a 45 degree supply curve, which will lead to recession.
Answer:A
Referring to the diagram above, complete the following sentence: Any increase in aggregate demand in the short-run will lead to:
A. an increase in output (Q1 to Q2), but it will also lead to prices increasing. B. an increase in output (Q1 to Q2), but it will also lead to a recession. C. a 45 degree supply curve, which will lead to increasing unemployment. D. a 45 degree supply curve, which will lead to recession.
Explanation: Type: Multiple Choice