Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?
A)the leftward shift of the short-run aggregate supply curve that occurs after a recession
B)the rightward shift of the short-run aggregate supply curve that occurs after a recession
C)the leftward shift of the aggregate demand curve that occurs after a recession
D)the rightward shift of the aggregate demand curve that occurs after a recession
E)the rightward shift of the long-run aggregate supply curve that occurs after a recession

Question

Quizplus · Accepted Answer

The automatic mechanism through which the economy adjusts to long-run equilibrium often involves the rightward shift of the short-run aggregate supply curve after a recession. This adjustment typically occurs as firms increase production in response to improved economic conditions, leading to a recovery towards long-run equilibrium.

Which of the Following Correctly Describes the Automatic Mechanism Through