Refer to the Information Provided in Figure 27

Multiple Choice

Refer to the information provided in Figure 27.3 below to answer the question(s) that follow. Figure 27.3
-Refer to Figure 27.3. Assume the economy is currently at Point A on aggregate supply curve AS₁. An increase in inflationary expectations that causes firms to increase their prices

A) shifts the aggregate supply curve to AS₀.
B) shifts the aggregate supply curve to AS₂.
C) moves the economy to Point C on aggregate supply curve AS₁.
D) moves the economy to Point B on aggregate supply curve AS₁.