Suppose that there is a positive aggregate supply shock. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.
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Hint
Suppose that there is a negative aggregate supply shock. Which graph most accurately shows how this would affect aggreagte demand - aggregate supply model. Note that the new curve is shown in gray.
AAAAly curve shifts left:
Hint
Suppose that we observe decrease in input prices. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.
AAAAly curve shifts right:
Hint
Suppose that we observe increase in input prices. Which graph most accurately shows how this would affect aggregate demand - aggregate supply model. Note that the new curve is shown in gray.