Multiple Choice
Refer to the diagram below.The initial aggregate demand curve is AD1 and the initial aggregate supply curve is AS1.Assuming no change in aggregate demand, the long-run response to a recession caused by cost-push inflation is best depicted as a:
A) move from a to d along the long-run aggregate supply curve.
B) rightward shift of the aggregate supply curve from AS2 to AS1.
C) move from a to c to d.
D) leftward shift of the aggregate supply curve from AS1 to AS2.
Correct Answer:
Verified
Related Questions
Q19: If government uses its stabilization policies to
Q42: Assuming prices and wages are flexible, a
Q49: An increase in inflation is likely to
Q53: Demand-pull inflation in the short run increases