The effects of 9/11 were a leftward shift in the AD curve; short-run output fell along the AS curve.

Name: The effects of 9/11 were a leftward shift in the AD curve; short-run output fell along the AS curve.
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Question

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The terrorist attacks of 9/11 led to a decrease in consumer and business confidence, which caused a leftward shift in the aggregate demand (AD) curve. This resulted in a decrease in short-run output along the aggregate supply (AS) curve. So, the statement is true.

The Effects of 9/11 Were a Leftward Shift in the AD