The Three Figures Below Show the Phases of a Disinflation

Multiple Choice

The three figures below show the phases of a disinflation.In part (i) ,the economy is experiencing a sustained inflation at E₁. FIGURE 29-4 Refer to Figure 29-4,part (ii) .The upward shift of the AS curve in Phase 2 is normally caused by

A) workers accepting a reduction in their wages.
B) an increase in the productivity of workers.
C) the Bank of Canada engaging in an expansionary monetary policy.
D) an increase in the unemployment rate.
E) inflationary expectations that cause wages to continue rising.