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QUESTION

Figure 11.9 LRAS SRAS D Price Level {CPI) AD Real GD?

i don't know how to solve this question, could you please help mr explain it? thanks

Figure 11.9LRASSRASDPrice Level{CPI)ADReal GD? {eraliens of 2007 dollars)36) Refer to Figure 11.9. Suppose the Bank of Canada lowers its target for the overnight interest rate. Using thestatic AD-AS model in the figure above, this situation would be depicted as a movement fromA) C to B.B) B to A.C) C to D.D) A to B.E) E to A.
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