Figure 33-6. -Refer to Figure 33-6.Which of the long-run aggregate-supply curves is consistent with a recession? A)LRAS₁ B)LRAS₂ C)LRAS₃ D)Both LRAS₁ and LRAS₃

Question

Quizplus · Accepted Answer

The LRAS curve labeled LRAS₃ is consistent with a recession because it has shifted to the left, indicating a decrease in potential output due to factors such as a decrease in productivity or a decrease in the availability of resources. The other LRAS curve labeled LRAS₁ is also consistent with a recession as it also has shifted to the left, but it is not the best choice because it indicates a smaller decrease in potential output compared to the LRAS₃ curve.

Figure 33-6. -Refer to Figure 33-6.Which of the Long-Run Aggregate-Supply Curves Is