Question: Consider a situation in which banks, terrified by recent defaults on loans, cut back drastically on who qualifies for home and business lending (this may

Consider a situation in which banks, terrified by recent defaults on loans, cut back drastically on who qualifies for home and business lending (this may sound familiar...). In the short run we would see and as we move to the long run we would see
• AD right; SRAS left
• AD left; SRAS right
• AD left; SRAS left
• AD right; SRAS right

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