Exhibit 16-4 -Refer to Exhibit 16-4.The Economy Is Initially at Point A,in

Exhibit 16-4

-Refer to Exhibit 16-4.The economy is initially at point A,in long run equilibrium.A real business cycle would be represented by the following sequence of curve shifts:

A) SRAS₁ to SRAS₂, then LRAS₁ to LRAS₂.
B) AD₁ to AD₂, then LRAS₁ to LRAS₂.
C) LRAS₁ to LRAS₂, then AD₁ to AD₂.
D) LRAS₁ to LRAS₂, then SRAS₁ to SRAS₂.
E) none of the above