Look at the image below. Which of the following best describes how asset 10 points price deation can affect the economy? A decrease in asset prices shifts the AD curve to the left from ADC to ADB and the 0 economy moves to point H with lower prices. As output is below potential, the SAS curve shifts from SASE to SASD and the economy moves to point C at a lower price level. A fall in asset prices shifts the AD curve to the left from ADC to ADB and the 0 economy moves to point H at a lower price level. As prices fall, the AD curve shifts back to ADB. The economy corrects itself. A decrease in asset prices shifts the AD curve to the left from ADC to ADB and the 0 economy moves to point H with lower prices. Expectations of further deation shift the AD curve again to the left from ADB to ADA bringing the economy to point G. This vicious cycle could continue. A fall in asset prices shifts the SAS curve from SASE to SASD and the economy 0 moves to point D at a higher level of output and lower prices. As prices have fallen, the AD curve shifts from ADC to ADB bringing the economy to point C. Since prices are so low, the cycle can continue