Refer to the Graph Above

question 18

Multiple Choice

Refer to the graph above. Stagflation in the short run is best represented as resulting from a shift of:

• A) AD₁ to AD₂ given a stable AS₁ curve
• B) AD₂ to AD₁ given a stable AS₁ curve
• C) AS₁ to AS₂ given a stable AD₁ curve
• D) AS₂ to AS₁ given a stable AD₁ curve

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