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) .If the AS curve continues to drift upward during Phase 2 of the disinflation process,the economy will experience

A) falling unemployment and rising output.
B) falling real wages and factor prices and falling unemployment.
C) rising real wages and factor prices and rising employment.
D) rising unemployment and falling output.
E) a falling price level and falling output.