Refer to the following figure (an aggregate supply/aggregate demand model) when answering the following questions.
Figure 13.4: AS/AD Model
-Consider Figure 13.4. Unrest in the Middle Eastern country of Syria would cause the economy to initially move from point ________ to point ________; eventually the economy would return to the steady state at point ________.
A) c; a; b
B) c; d; a
C) a; d; a
D) b; a; c
E) Not enough information is given.

Question

Refer to the following figure (an aggregate supply/aggregate demand model) when answering the following questions.
Figure 13.4: AS/AD Model 
-Consider Figure 13.4. Unrest in the Middle Eastern country of Syria would cause the economy to initially move from point ________ to point ________; eventually the economy would return to the steady state at point ________.
A) c; a; b 
B) c; d; a 
C) a; d; a 
D) b; a; c 
E) Not enough information is given.

Quizplus · Accepted Answer

C) a; d; a. In the context of an economic model, unrest in a country like Syria could initially disrupt economic activity, moving the economy from a steady state (point a) to a point of lower economic output or higher unemployment (point d) due to the immediate impacts of the unrest. Over time, as the country recovers and adapts to the new conditions, the economy would return to its original steady state (back to point a), assuming no permanent changes to the economy's fundamental capacity to produce.

Refer to the Following Figure (An Aggregate Supply/aggregate Demand Model)