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The Aggregate Demand-Aggregate Supply Model Practice Test
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Q1
Based on the AD–AS model shown, the economy moves from $E_1$ to $E_2$ after the central bank purchases government securities, increasing the money supply and shifting aggregate demand from $AD_1$ to $AD_2$ in the short run. Which statement is correct?
Based on the AD–AS model shown, the economy moves from $E_1$ to $E_2$ after the central bank purchases government securities, increasing the money supply and shifting aggregate demand from $AD_1$ to $AD_2$ in the short run. Which statement is correct?