Question
In: Accounting
Refer to Scenario 33-2. Which curve shifts and in which direction?
Scenario 33-2
Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time.
Refer to Scenario 33-2. Which curve shifts and in which direction?
a. Aggregate demand shifts left.
b. Aggregate supply shifts left.
c. Aggregate demand shifts right.
d. Aggregate supply shifts right
Solutions
Expert Solution
The correct answer would be Option 3 - Aggregate Demand shifts
right
Reason: Rise in stock price increases house hold wealth resumts
into increase in consumption and aggregate demand, shifting
aggregate demand curve to right.
ekkarill92 answered 2 years agoRelated Solutions
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