Multiple Choice
(Figure: Shifting the AD and SRAS) 
Assume the economy depicted in the figure above is in long-run equilibrium, where the aggregate demand curve is AD0 and the short-run aggregate supply curve is SRAS0. If there is a supply shock, such as a drastic increase in the price of oil, this will cause a _____ and a movement to a short-run equilibrium at point _____.
A) leftward shift in AD1; a
B) rightward shift in AD1; c
C) rightward shift in SRAS2; c
D) leftward shift in SRAS2; a
Correct Answer:
Verified
Correct Answer:
Verified
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