FIGURE 24-2 Refer to Figure 24-2

Multiple Choice

FIGURE 24-2 Refer to Figure 24-2.Suppose the economy is in equilibrium at Y₁.The economy's automatic adjustment process will restore potential output,Y^*,through

A) wage increases and a leftward shift of the AS curve.
B) wage increases and a rightward shift in the AS curve.
C) wage decreases and a rightward shift of the AD curve.
D) an increase in potential GDP to intersect both the AD and AS curves at B.
E) a leftward shift of the AD to intersect both the AS and potential GDP at A.