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The macroeconomy is at a short-run equilbrium at P1 and Q1. What is wrong with the following diagram showing it moving to the long-run equilibrium?
The macroeconomy is at a short-run equilbrium at P1 and Q1. What is wrong with the following diagram showing it moving to the long-run equilibrium? Description of the diagram is below the diagram. This is a diagram with price on the vertical axis and quantity on the horizontal axis. There is a place marked on the horizontal axis with a QN. There is an upward sloping line labelled SRAS and a downward sloping line labelled AD1. The place these two lines intersect is labelled Q1 on the horizontal axis and P1 on the vertical axis. Q1 is to the left of QN. There is a second downward sloping line to the right of the first line labelled AD2. This line also intersects SRAS and the place these two lines intersect is at QN on the horizontal axis and P2 on the vertical axis. Group of answer choices Nothing. The AD curve has shifted too far to the right. It should be unemployment on the horizontal axis rather than quantity. It should be the SRAS curve shifting right, not the AD curve
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