Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, a new general equilibrium will eventually be reached in sector Y with a price of ________ and a quantity of ________.
A. P1; Q0
B. P1; Q1
C. P0; Q0
D. P0; < Q1
Answer: D
Economics
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A reduction in the central bank's inflation target shifts the dynamic aggregate demand curve to the left resulting in:
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