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The economy is at Q1 and P1 at the end of the short-run. The following diagram shows the long-run adjustment. What is wrong with the
The economy is at Q1 and P1 at the end of the short-run. The following diagram shows the long-run adjustment. What is wrong with the diagram? Diagram description below the diagram. This is a diagram with price on the vertical axis and quantity on the horizontal axis. There is an AD1 curve that slopes down and an AD2 that is to the left of AD1 and also slopes down. There is an SRAS curve that slopes up. Where AD1 and SRAS intersect, there is a P1 marked on the vertical axis and a Q1 marked on the horizontal axis. Where AD2 and SRAS intersect, there is a P2 marked on the vertical axis and a QN marked on the horizontal axis. P2 is below P1 and Q1 is to the right of QN. Group of answer choices Nothing. It should be the SRAS curve that shifts left, not the AD curve. No curves should shift, and we should stay at P1 and Q1. There is no Pn marked on the price axis which is the natural price level that we always return to
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