Figure: Understanding SRAS and LRAS Shifts (Figure: Understanding SRAS and LRAS Shifts)This graph shows:

Question

Figure: Understanding SRAS and LRAS Shifts  (Figure: Understanding SRAS and LRAS Shifts)This graph shows:

Quizplus · Accepted Answer

The graph shows shifts in both the short-run aggregate supply (SRAS) and the long-run aggregate supply (LRAS), indicating changes in the economy's productive capacity. Supply-side fiscal policies aim to shift the LRAS curve, while demand-side fiscal policies aim to shift the aggregate demand (AD) curve. Therefore, the graph represents supply-side fiscal policies.