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Refer to the Diagram AS2 to AS1\mathrm { AS } _ { 2 } \text { to } \mathrm { AS } _ { 1 }

Question 36

Multiple Choice

   Refer to the diagram. 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 A  \mathrm { AS } _ { 2 } \text { to } \mathrm { AS } _ { 1 }  C)  move from a to c to d. D)  leftward shift of the aggregate supply curve from A  \mathrm { AS } _ { 1 } \text { to } \mathrm { AS } _ { 2 }
Refer to the diagram. 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


A) move from a to d along the long-run aggregate supply curve.
B) rightward shift of the aggregate supply curve from A AS2 to AS1\mathrm { AS } _ { 2 } \text { to } \mathrm { AS } _ { 1 }
C) move from a to c to d.
D) leftward shift of the aggregate supply curve from A AS1 to AS2\mathrm { AS } _ { 1 } \text { to } \mathrm { AS } _ { 2 }

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