Final answer:
The 2011 disaster in Japan would be depicted in the aggregate demand-aggregate supply model as a leftward shift in the aggregate supply curve due to the destruction of capital, leading to a contraction in economic activity and potential stagflation.
Step-by-step explanation:
Using the aggregate demand-aggregate supply model to illustrate the effect of the 2011 disaster on the Japanese economy, we can depict a leftward shift in the aggregate supply (AS) curve. This shift represents a decrease in the productive capacity of the economy due to the destruction of significant capital, including roads, buildings, and nuclear power plants. The damage to infrastructure and production capacity reduces the nation's ability to produce goods and services at any given price level, thus contracting the AS curve.
On the aggregate demand (AD) side, the disaster might have also caused a shift due to changes in consumer confidence, investment, and net exports. If the disaster resulted in decreased consumer spending and investment due to uncertainty and destruction, the AD curve would shift to the left. However, an influx of disaster relief and reconstruction spending could potentially offset or even increase AD in the short term. In the long run, the recovery efforts might lead to a rightward shift in AD due to reconstruction activities and increased investment.
The intersection of the AD and AS curves now occurs at a lower level of output, indicating a contraction in economic activity, with likely higher prices due to the reduced supply of goods and services. This combination could result in stagflation, where the economy faces both inflation and unemployment simultaneously.