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Refer to the Diagram Below

Question 67

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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: Refer to the diagram below.The initial aggregate demand curve is AD<sub>1</sub> and the initial aggregate supply curve is AS<sub>1</sub>.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 AS<sub>2</sub> to AS<sub>1</sub>. C) move from a to c to d. D) leftward shift of the aggregate supply curve from AS<sub>1</sub> to AS<sub>2</sub>.


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.

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