Exhibit 9-4 -Refer to Exhibit 9-4.Assuming the Economy Is in an Inflationary

Multiple Choice

Exhibit 9-4

-Refer to Exhibit 9-4.Assuming the economy is in an inflationary gap at a short-run equilibrium point with the price level at P₂,the movement toward long-run equilibrium will be

A) down and along AD₁.
B) up and along AD₂.
C) down and along SRAS₁.
D) up and along SRAS₂.
E) down and along SRAS₂.