(Solved): The diagram below represents the aggregate demand and aggregate supply of the United States in equi ...

The diagram below represents the aggregate demand and aggregate supply of the United States in equilibrium. Suppose a severe. widespread drought in the Midwest causes a poor grain crop. a. Using the AD-AS model below, grophically show the impact of the drought on aggregate demand or aggregate supply. Assume no other changes in the economy: Instructions: Use the tool provided 'New line' and draw either a new aggregate demand curve of aggregate supply curve to depict this event. Plot only the endpoints of the line. $AD$ and $AS$ in the Short Run Instructions: Use the tool provided 'New line' and draw either a new aggregate demand curve or aggregate supply curve to dep this event. Plot only the endpoints of the line. (i) $AD$ and $AS$ in the Short Run b. The phenomenon depicted in the diagram is known as cost-pull inflation. deflation. demand-pull inflation. cost-push inflation.