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 (iii) .The movement of the economy from E₃ to E₄ in Phase 3 is often caused by

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