Figure 33-9.
-Refer to Figure 33-9. Suppose the economy starts where LRAS = AD1 = SRAS1. A decrease in short-run aggregate supply would be consistent with the movement to
A) P1, Y1.
B) P2, Y1.
C) P1, Y2.
D) P3, Y2.

Question

Figure 33-9. 
-Refer to Figure 33-9. Suppose the economy starts where LRAS = AD1 = SRAS1. A decrease in short-run aggregate supply would be consistent with the movement to
A) P1, Y1. 
B) P2, Y1. 
C) P1, Y2. 
D) P3, Y2.

Quizplus · Accepted Answer

A decrease in short-run aggregate supply would shift the SRAS1 curve to the left. This would result in a higher price level (P2) and a lower output level (Y1), which is consistent with point B on the graph.

Figure 33-9. -Refer to Figure 33-9. Suppose the Economy Starts Where LRAS