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Exhibit 14A-1  Aggregate Demand and Supply Model Beginning from Short-Run

Question 24

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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 14A-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 14A-1, the economy's movement to a new position of long-run equilibrium would best be described as:


A) a movement along the AD2 curve with a shift in the SRAS1 curve.
B) a movement along the SRAS2 curve with a shift in the AD2 curve.
C) a shift in the LRAS curve to an intersection at E1.
D) no shift of any kind.

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