A model that is an oversimplification for one purpose will likely be an oversimplification for other purposes as well

After a temporary adverse supply shock hits the economy, general equilibrium is restored by

A) a shift down and to the left of the IS curve. B) a shift to the left of the FE line. C) a shift up and to the left of the LM curve. D) a shift down and to the right of the IS curve.

Keynesian economists today favor a model in which the aggregate supply curve is relatively flat at low levels of real GDP and slopes downward as real GDP approaches its potential level

a. True b. False Indicate whether the statement is true or false