Given the information in Figure 2 :

(a) If aggregate demand shifts from AD 1 to AD 2 , what happens to the level of prices and to output?

(b) If aggregate demand shifts from AD 2 to AD 3 , what happens to the level of prices and to output?

(c) If aggregate demand shifts from AD 3 to AD 4 , what happens to the level of prices and to output? ( LO4 )

Figure 2 Price level AD4 AD3 AD2 AD Real GDP