On the Aggregate Demand & Aggregate Supply diagram below, all of the curves are at theircorrectposition, but two of the Equilibriums have beenmisplaced.An economic event has occurred and it is up to you to determine where the new positions of the Equilibriums lay.

• The two misplaced Equilibriums are the "Short-Run Equilibrium (E₁)" and "Long-Run Equilibrium (E₂)."
• The original Equilibrium (E₀) is in its correct position and does not need to be moved.

The Event:A decrease in consumer wealth driven by falling asset prices has caused a decrease in consumer expenditures. The decrease in consumption has caused Aggregate Demand to shift from"AD₀to AD₁" and Short-Run Aggregate Supply to shift from "SRAS₀to SRAS₁," respectively. Reposition these points to reflect the change in the economy due to the event described above.

In order to solve this correctly, you will need to ask yourself:

1. For E₁, how does the shift in AD changethe price level and real GDP in theshort-run?
2. For E₂, how dothe shifts in AD and SRAS changethe price level and real GDP in thelong-run?

To understand the diagram, abbreviation descriptions are provided:

• E₀= original Equilibrium
• E₁= Short-Run Equilibrium (= Keynesian)
• E₂= Long-Run Equilibrium (= Neoclassical)
• AD₀= original Aggregate Demand curve
• AD₁= Aggregate Demand curve
• SRAS₀= original Short-Run Aggregate Supply curve
• SRAS₁= Short-Run Aggregate Supply curve
• LRAS = Long-Run Aggregate Supply curve

Provide your answer below: