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What is wrong with the following diagram showing the effect of a decrease in aggregate demand in the short-run? Description is below the diagram. This
What is wrong with the following diagram showing the effect of a decrease in aggregate demand in the short-run? Description is 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 QN marked on the horizontal axis. Where AD2 and SRAS intersect, there is a P2 marked on the vertical axis and a Q2 marked on the horizontal axis. P2 is below P1 and Q2 is to the left of QN. Group of answer choices Instead of AD shifting, the SRAS curve should shift left. Nothing. The AD curve should shift right. At the end of the short-run, production always has to be at Qn
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