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Exhibit 14A-1 Aggregate Demand and Supply Model

Question 122

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Exhibit 14A-1 Aggregate demand and supply model
Exhibit 14A-1 Aggregate demand and supply model Beginning from short-run equilibrium at point E<sub>2</sub> in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as: A) a movement along the AD<sub> 2 </sub> curve with a shift in the SRAS<sub> 1 </sub> curve. B) a movement along the SRAS<sub> 2 </sub> curve with a shift in the AD<sub> 2 </sub> curve. C)  a shift in the LRAS curve to an intersection at E<sub> 1 </sub>. D) no shift of any kind.
Beginning from short-run equilibrium at point E2 in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:


A) a movement along the AD 2 curve with a shift in the SRAS 1 curve.
B) a movement along the SRAS 2 curve with a shift in the AD 2 curve.
C)  a shift in the LRAS curve to an intersection at E 1 .
D) no shift of any kind.

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