Use the figure below to answer the following questions.
Figure 10.3.1
-Refer to Figure 10.3.1.As the economy automatically adjusts to long- run equilibrium, the
A)LAS curve shifts leftward.
B)AD curve shifts rightward.
C)SAS curve shifts leftward.
D)AD curve shifts leftward.
E)SAS curve shifts rightward.

Question

Use the figure below to answer the following questions.
  Figure 10.3.1
-Refer to Figure 10.3.1.As the economy automatically adjusts to long- run equilibrium, the
A)LAS curve shifts leftward. 
B)AD curve shifts rightward. 
C)SAS curve shifts leftward. 
D)AD curve shifts leftward. 
E)SAS curve shifts rightward.

Quizplus · Accepted Answer

The SAS curve shifts rightward because the economy is automatically adjusting to long-run equilibrium, which means that the economy is moving towards a point where the AD curve and the SAS curve intersect. As the economy moves towards this point, the SAS curve will shift rightward to meet the AD curve.

Use the Figure Below to Answer the Following Questions