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Question
Refer to the above figure. Suppose the original long -run equilibrium was at point B. What could have caused the move to the current equilibrium?
A) Decreases in the price level caused short-run aggregate supply to fall.
B) Input prices must have increased, causing long -run aggregate supply to increase.
C) Aggregate demand must have decreased.
D) A temporary reduction in production due to bad weather.
Answer
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