Question

Question 2 

Use the following figures to answer the next question. 

A decline in aggregate expenditures from AEZ to AE, resulting from the real-balances, interest-rate, and foreign purchases effects would be depicted as a 

movement from A to C along aggregate demand curve AD1. 

movement from C to A along aggregate demand curve AD1.

shift of aggregate demand from AD1 to AD3

shift of aggregate demand from AD2 to AD1.

Question 4 

Use the following graph to answer the next question. 

 If AD, shifts to AD2, the full multiplier effect would be an increase in real GDP from 

Answer 1

Q2
Answer
option 2
the AE decrease which is a movement along the AD curve from C to A as the aggregate demand curve is the same but the real output decreases so the price level increases.
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Q3
Answer
Option 2
Q1 to Q3
the full multiplier effect increases the GDP from Q1 to Q3 where the price level is kept constant but the increase in price level creases it to the Q2