-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:
A) demand-pull inflation would involve a shift of curve D to the right.
B) cost-push inflation would involve a shift of curve B downward.
C) recession would involve a leftward shift of curve A.
D) frictional unemployment would be zero in the long run.

Question

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:
A) demand-pull inflation would involve a shift of curve D to the right. 
B) cost-push inflation would involve a shift of curve B downward. 
C) recession would involve a leftward shift of curve A. 
D) frictional unemployment would be zero in the long run.

Quizplus · Accepted Answer

The Answer of 
-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:
A) demand-pull inflation would involve a shift of curve D to the right. 
B) cost-push inflation would involve a shift of curve B downward. 
C) recession would involve a leftward shift of curve A. 
D) frictional unemployment would be zero in the long run.

-Refer to the Above Diagram and Assume That Prices and Wages