Question

AD-AS graph has one vertical LRAS line, one upward-sloping SRAS line, and three downward sloping AD lines (AD1, AD2, and AD3 from left to right). There are 5 labeled intersecting points (points A-E). Point A is near the top of the LRAS line, where AD3 intersects with it. Point B is to the right of the LRAS line, where AD3 intersects with the SRAS line. Point C is on the LRAS line, where AD2 and the SRAS line all intersect. Point D is to the left of the LRAS line, where AD1 intersects with the SRAS line. Point E is near the bottom of the LRAS line, where it intersects with AD1. In the basic AD-AS model, short-run contractionary fiscal policy will shift to the _. Group of answer choices aggregate demand; left short-run aggregate supply; right aggregate demand; right short-run aggregate supply; left

          AD-AS graph has one vertical LRAS line, one upward-sloping SRAS line, and three downward sloping AD lines (AD1, AD2, and AD3 from left to right). There are 5 labeled intersecting points (points A-E). Point A is near the top of the LRAS line, where AD3 intersects with it. Point B is to the right of the LRAS line, where AD3 intersects with the SRAS line. Point C is on the LRAS line, where AD2 and the SRAS line all intersect. Point D is to the left of the LRAS line, where AD1 intersects with the SRAS line. Point E is near the bottom of the LRAS line, where it intersects with AD1.
In the basic AD-AS model, short-run contractionary fiscal policy will shift ________ to the _________.
Group of answer choices

aggregate demand; left

short-run aggregate supply; right

aggregate demand; right

short-run aggregate supply; left

Added by Dave C.

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