A major hurricane causes production problems in Gulf Coast region of the United States. This would cause
A) the short-run aggregate supply curve to shift to the left, but there would be no effect on the long-run aggregate supply curve.
B) the short-run aggregate supply curve to shift to the left, and the long-run aggregate supply curve would shift to the right.
C) both the short-run and the long-run aggregate supply curves to shift to the right in equal amounts.
D) both the short-run and the long-run aggregate supply curves to shift to the left, but the long-run aggregate supply curve would shift more than the short-run curve.
A
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Suppose the economy is in a long-run equilibrium when a positive demand shock occurs. On the graphs above, show what happens to bring the economy back to long-run equilibrium, assuming that there is no policy response
In words, describe how the graph would be different, if policy makers did intervene.
Movement along the aggregate supply curve is referred to as a change in aggregate quantity supplied
a. True b. False Indicate whether the statement is true or false