Graphically inflation shocks shift the ________ and shocks to potential shift the ________.
A)aggregate demand curve; long-run aggregate supply line
B)aggregate demand curve; short-run aggregate supply line
C)short-run aggregate supply line; long-run aggregate supply line
D)long-run aggregate supply line; short-run aggregate supply line

Question

Quizplus · Accepted Answer

Inflation shocks are modeled as shifts upward or downward of the SRAS curve, while changes in potential output are modeled as shift left and right of the LRAS.

Graphically Inflation Shocks Shift the ________ and Shocks to Potential