During the recession of 2001, despite the decrease in aggregate demand, the price level was essentially stable. Which of the following is a reason for this?
Firms responded to the decline in output demanded by making quantity adjustments and not price adjustments.
The short-run aggregate supply curve must have also shifted to the left.
The short-run aggregate supply curve must have also shifted to the right.
The short-run aggregate supply curve must be horizontal due to severe wage and price stickiness.