An economy is initially operating at point B on the aggregate demand curve AD1AD_1AD1 (corresponding to a price level of P2 P_2\,P2 and real output of Y2Y_2Y2), as shown in the diagram below.
Due to global supply constraints, the economy experiences a sharp increase in the general price level to P1P_1P1, with all other macroeconomic determinants of demand remaining unchanged.
Which transition on the diagram correctly illustrates this economic change?
A movement along the curve from point B to point A
A parallel shift of the aggregate demand curve from AD1AD_1AD1 to AD2AD_2AD2
A parallel shift of the aggregate demand curve from AD1AD_1AD1 to AD3AD_3AD3
A movement along the curve from point A to point B