Refer to the Graph Below

question 79

Multiple Choice

Refer to the graph below.The effects of stagflation, in the short run, are best represented by a shift from:

• A)AD₁ to AD₂ given a stable AS₁curve, an increase in the price level from P₁to P_2, and a fall in output from Q₁ to Q₂.
• B)AD₂ to AD₁ given a stable AS₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂.
• C)AS₁ to AS₂ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂.
• D)AS₂ to AS₁ given a stable AD₁ curve, an increase in the price level from P₁ to P₂, and a fall in output from Q₁ to Q₂.

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