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Suppose that a shift has caused aggregate demand to cross the aggregate supply curve to the right of the intermediate range. Which of the following statements is true?

A

Unemployment is above natural rate.

B

Price level will decrease as a result of the shift.

C

Short-run output will increase and so will short- and long-run price level as a result of the shift.

D

Overtime will reduce as a result of the shift.

E

The Fed might consider reducing interest rates because of this event.

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