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The accompanying graphs illustrate an initial equilibrium for the economy. Suppose that oil prices increase temporarily. Use the graphs to show the new positions of

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The accompanying graphs illustrate an initial equilibrium for the economy. Suppose that oil prices increase temporarily.

Use the graphs to show the new positions of aggregate demand (AD), short-run aggregate supply (SRAS), and long-run aggregate supply (LRAS) in both the short-run and the long-run, as well as the short-run (ESR) and long-run (ELR) equilibria resulting from this change.

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Economy in the Short Run LRAS SRAS E Aggregate price level SR AD Real GDP

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