*on the graph, there is an error: the three top as graphs should be, from left to right: as3, as2, as1 right now they read ad3, as2, as1* assume the economy is in initial equilibrium where as1 intersects ad1. then a supply shock occurs that shifts as1 to as2. if the government counters with an expansionary fiscal policy, what should shift should happen to bring the economy back to equilibrium? g *on the graph, there is an error: the three top as graphs should be, from left to right: as3, as2, as1 right now they read ad3, as2, as1* assume the economy is in initial equilibrium where as1 intersects ad1. then a supply shock occurs that shifts as1 to as2. if the government counters with an expansionary fiscal policy, what should shift should happen to bring the economy back to equilibrium? ad1 will shift to ad2 as2 will shift to as3 and ad2 will shift to ad1. as2 will shift to as1 ad2 will shift to ad1
