Refer to the Diagram Given Below

Multiple Choice

Refer to the diagram given below. Assume that nominal wages are initially set on the basis of the price level P₂ and that the economy is initially operating at the full-employment level of output Q_f.In the short run, an increase in the price level from P₂ to P₃ will:

A) shift the aggregate supply curve from AS₂ to AS₃.
B) increase the real output from Q₁ to Q₂.
C) shift the aggregate supply curve from AS₂ to AS₁.
D) increase the real output from Q_f to Q₂.