Time 1 to Time 2": Global Pandemic Shock & Response

Explanation for each curve shift and for the reasonableness of your depiction of where the economy is at each point with respect to the price pressure and the output gap. Be sure to provide full explanation/support for each of the curve shifts and the corresponding short-run SRAS-AD equilibrium point at each time.

Time 1 / Point B: captures the "immediate" impact of the shock as it "hit" / "rolled over" the economy. In this case, it captures the impact the response of households, firms and the rest of the world to the pandemic as well as the impact of the various governments' public-health oriented regulatory responses (as opposed to the monetary and fiscal responses) (beginning end of March as both voluntary and involuntary lock-downs and "from home" arrangements began impacting the economy)

Time 2 / Point C: captures the market adjustment - on its own - over time without macroeconomic policy. (There is no actual calendar time here because it is purely a thought experiment. Conceptually, how would the market adjust on its own with no fiscal (automatic or discretionary) or monetary policy intervention.)

Time 2' / Point D: captures the combination of the market response AND any macroeconomic policy (automatic or discretionary. {Let's artificially set this to be a point in time when the economy was still directly and significantly impacted by COVID but macroeconomic policy had also kicked in. Let's say, roughly, end of 2020, beginning of 2021}

Time 2" / Point E: captures the combination of the market response, the evolution of any macroeconomic policy (automatic or discretionary, AND the evolution of the underlying public health disruption to the economy (i.e. "living with" COVID). {Let's say, roughly, the end of 2021.}