Multiple Choice
Exhibit 17-3 Aggregate demand and aggregate supply curves 
As shown in Exhibit 17-3, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the price level to move:
A) from 100 to 110 initially and then eventually move back to 100.
B) directly from 100 to 110 and then remain at 110.
C) directly from 100 to 120 and then remain at 120.
D) from 100 to 110 initially and then eventually move to 120.
Correct Answer:
Verified
Correct Answer:
Verified
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