Use the following graph to answer the next question.Suppose an economy is in equilibrium at its full employment output level Q2. Next, suppose the outcome of political events causes pessimism among businesses and consumers and the economy's aggregate demand shifts to AD1 (and the new equilibrium output is Q1). Excluding other events, if the government fails to implement expansionary fiscal policy, in the long run, we would expect Real GDP in the economy to
A. shift toward Q0.
B. shift past Q2 toward Q3.
C. shift back toward Q2.
D. remain at Q1.
Answer: C
Economics