What are the eff ects of an adverse supply shock? Discuss. ‘Th e aggregate demand curve charts out the IS–LM equilibrium while holding the nominal money supply and autonomous expenditures constant...

What are the eff ects of an adverse supply shock? Discuss.

‘Th e aggregate demand curve charts out the IS–LM equilibrium while holding the nominal money supply and autonomous expenditures constant but allowing the prices to change.’ Explain.