What is the effect of a rise in the price of oil on the U.S. economy? How does the economy return to its long-run equilibrium? What is stagflation? Question content area bottom left Part 1 The graph shows the U.S. economy at a full-employment equilibrium. Draw a curve that shows the effect of a rise in the price of oil. Label it 1. Draw a point at the new macroeconomic equilibrium. Label it E Subscript 1. Draw a curve that shows the economy returning to a full-employment equilibrium with no action by the central bank or the government. Label it 2. Draw a point at the full-employment equilibrium. Label it E Subscript 2. Part 2 Stagflation _______. A. occurs when aggregate demand decreases by more than aggregate supply increases B. is a combination of recession and inflation. C. has not been experienced in the United States since the Great Depression D. is another name for an inflationary gap