-Using the above figure, a recession in the monetarist model would start with a
A) rightward shift in the AD curve.
B) leftward shift in the SAS curve.
C) leftward shift in the AD curve.
D) leftward shift in the LAS curve.

Question

-Using the above figure, a recession in the monetarist model would start with a
A) rightward shift in the AD curve. 
B) leftward shift in the SAS curve. 
C) leftward shift in the AD curve. 
D) leftward shift in the LAS curve.

Quizplus · Accepted Answer

In the monetarist model, a recession typically begins with a decrease in aggregate demand, represented by a leftward shift in the AD curve. This shift indicates a reduction in overall spending in the economy, leading to lower output and employment.

-Using the Above Figure, a Recession in the Monetarist Model