There is quite a bit of trade between Canada and the east coast of the United States. After Super Storm Sandy destroyed an immense amount of property along the U.S. eastern seaboard, firms in the area directed their own production toward the rebuilding effort, but they also greatly expanded their purchases from Canada to help with the rebuilding.

Consider the graph of Canada's economy depicted below. Before the storm, the Canadian economy was at the intersection of the AD1aggregate demand curve and the SRAS1short-run aggregate supply curve, which is depicted by Point A. Suppose that for the remainder of this question, Sandy did not does any damage to Canada. This is an approximate characterization of the impact of the storm, because most of the damage that it inflicted was in the United States.

When the east coast of the United States starts rebuilding after the storm, the economy in Canada will be influenced in the following way.

Choose one:

A.Long-run aggregate supply

B.Short-run aggregate supply

C.Aggregate demand

will shift to the

Choose one:

A.left,

B.right,

moving the Canadian economy to

Choose one:

A.Point A.

B.Point B.

C.Point C.

D.Point D.

Part 2(1point)

Once the Canadian economy reaches this point, the long-run aggregate supply curve will

Choose one:

A.shift to the left.

B.shift to the right.

C.remain unchanged.

Part 3(2points)

Once all the storm damage has been repaired,Canada's aggregate demand curve will shift back to

Choose one:

A.AD1

B.AD3

C.AD2

and the economy will be operating, once again, at

Choose one:

A.Point C.

B.Point A.

C.Point B.

D.Point D.