Question: 1) Using your AS-AD diagram (with SRAS, LRAS and AD), graphically illustrate an economy that is presently at a long-run equilibrium. Label that equilibrium point

1) Using your AS-AD diagram (with SRAS, LRAS and AD), graphically illustrate an economy that is presently at a long-run equilibrium. Label that equilibrium point A.

2). In the same diagram, graphically illustrate an equilibrium that is consistent with a stagflation (relative to point A). Label that new equilibrium point B.

You need to draw the diagram, label all axes and curves and upload a file with a picture of your diagram. Incomplete graphs, illegible graphs and unlabeled graphs with get very little points, if any. Moreover, graphs with additional details than needed will also receive lower points.

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