Refer to the graph below. The effects of stagflation, in the short run, are best represented by a shift from: A) AD₁ to AD₂ given a stable AS₁ curve, an increase in the price level from P₁ to P_2, and a fall in output from Q₁ to Q₂. B) AD₂ to AD₁ given a stable AS₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂. C) AS₁ to AS₂ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂. D) AS₂ to AS₁ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂.

Question

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The Answer of Refer to the graph below. The effects of stagflation, in the short run, are best represented by a shift from: A) AD₁ to AD₂ given a stable AS₁ curve, an increase in the price level from P₁ to P_2, and a fall in output from Q₁ to Q₂. B) AD₂ to AD₁ given a stable AS₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂. C) AS₁ to AS₂ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂. D) AS₂ to AS₁ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂.

Refer to the Graph Below