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(Figure: Shifting the AD and SRAS) Assume the Economy

Question 97

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(Figure: Shifting the AD and SRAS) (Figure: Shifting the AD and SRAS) Assume the economy depicted in the figure is in long-run equilibrium, where the aggregate demand curve is AD<sub>0</sub> and the short-run aggregate supply curve is SRAS<sub>0.</sub> 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 to AD<sub>1</sub>; a B) rightward shift to AD<sub>1</sub>; c C) rightward shift to SRAS<sub>2</sub>; c D) leftward shift to SRAS<sub>2</sub>; a Assume the economy depicted in the figure 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 to AD1; a
B) rightward shift to AD1; c
C) rightward shift to SRAS2; c
D) leftward shift to SRAS2; a

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