Figure 35-9.The left-hand graph shows a short-run aggregate-supply (SRAS)curve and two aggregate-demand (AD)curves.On the right-hand diagram,"Inf Rate" means "Inflation Rate." -Refer to Figure 35-9.The shift of the aggregate-supply curve from AS₁ to AS₂ A)results in a more favorable trade-off between inflation and unemployment. B)results in a more favorable trade-off between inflation and the growth rate of real GDP. C)represents an adverse shock to aggregate supply. D)represents a favorable shock to aggregate supply.

Question

Quizplus · Accepted Answer

The shift from AS1 to AS2 indicates a leftward shift in the aggregate supply curve, which typically represents an adverse shock, leading to higher prices and lower output.