Question

LRAS SRAS? P B Yp C A D SRAS? AD? AD? Y Graph with X-axis labeled Y and the Y-axis labeled P. Graph contains a single vertical line labeled LRAS. Where LRAS meets the X-axis, it is labeled YP. Graph also contains two parallel, upward sloping lines, labeled SRAS1 and SRAS2, SRAS 1 is above SRAS2. Graph also contains two parallel, downward sloping lines, labeled AD1 and AD2. AD1 is above AD2. There are four points, labeled A through D, where these lines intersect. Point A is where LRAS, SRAS2, and AD2 meet. Point B is where SRAS1 and AD2 meet. Point C is where LRAS, SRAS1 and AD1 meet. Point D is where SRAS2 and AD1 meet. Point A is lower along LRAS than Point C. Point B is to the left of the LRAS line, and Point D is to the right of the LRAS line. Refer to the figure above. Suppose the economy is at point C. If the price of oil decreases in the economy, where will the eventual long-run equilibrium be? OD OB OC OA

          LRAS
SRAS?
P
B
Yp
C
A
D
SRAS?
AD?
AD?
Y
Graph with X-axis labeled Y and the Y-axis labeled P. Graph contains a single vertical line labeled LRAS. Where LRAS meets the X-axis, it is labeled YP. Graph also contains two parallel, upward
sloping lines, labeled SRAS1 and SRAS2, SRAS 1 is above SRAS2. Graph also contains two parallel, downward sloping lines, labeled AD1 and AD2. AD1 is above AD2. There are four points,
labeled A through D, where these lines intersect. Point A is where LRAS, SRAS2, and AD2 meet. Point B is where SRAS1 and AD2 meet. Point C is where LRAS, SRAS1 and AD1 meet. Point D is
where SRAS2 and AD1 meet. Point A is lower along LRAS than Point C. Point B is to the left of the LRAS line, and Point D is to the right of the LRAS line.
Refer to the figure above. Suppose the economy is at point C. If the price of oil decreases in the economy, where will the eventual long-run equilibrium be?
OD
OB
OC
OA

LRAS
SRAS?
P
B
Yp
C
A
D
SRAS?
AD?
AD?
Y
Graph with X-axis labeled Y and the Y-axis labeled P. Graph contains a single vertical line labeled LRAS. Where LRAS meets the X-axis, it is labeled YP. Graph also contains two parallel, upward
sloping lines, labeled SRAS1 and SRAS2, SRAS 1 is above SRAS2. Graph also contains two parallel, downward sloping lines, labeled AD1 and AD2. AD1 is above AD2. There are four points,
labeled A through D, where these lines intersect. Point A is where LRAS, SRAS2, and AD2 meet. Point B is where SRAS1 and AD2 meet. Point C is where LRAS, SRAS1 and AD1 meet. Point D is
where SRAS2 and AD1 meet. Point A is lower along LRAS than Point C. Point B is to the left of the LRAS line, and Point D is to the right of the LRAS line.
Refer to the figure above. Suppose the economy is at point C. If the price of oil decreases in the economy, where will the eventual long-run equilibrium be?
OD
OB
OC
OA

Added by Timothy J.

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