An article in the Wall Street Journal noted that real GDP in Greece declined during 2016. The article stated that economists​ "attributed it to a​ 2.1% decline in​ [government spending] and weaker net​ exports."
​Source: Nektaria​ Stamouli, "Greek Economy Contracts at Faster Pace Than Estimated Adding Hurdle to Bailout​ Talks," Wall Street Journal​, March​ 6, 2017.
Use a basic aggregate demand and aggregate supply graph​ (with LRAS​ constant) to explain what happened in Greece in 2016. Assume the economy is initially in​ long-run equilibrium.
The ▼ _______ curve will shift to the ▼ _______.
The new​ short-run equilibrium will be where
A. the new aggregate demand curve intersects a new​ short-run aggregate supply curve.
B. the new aggregate demand curve intersects the original​ short-run aggregate supply curve.
C. the original​ short-run aggregate supply curve intersects the original​ long-run aggregate supply curve.
D. the new aggregate demand curve intersects the original​ long-run aggregate supply curve.