Refer to the Graph Given Below

Multiple Choice

Refer to the graph given below. Suppose an economy moves from point B₃ to point C₃ because of an increase in aggregate demand.Given the scenario, which of the following is likely to occur?

A) Nominal wages will rise, and profits will decrease, thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to B₄.
B) Real wages will rise, and profits will decrease, thereby negating the short-run stimulus to production and employment so that the economy moves from C₁ to B₁.
C) Nominal wages will rise, and profits will decrease, thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to B₃.
D) Nominal wages will rise, and profits will decrease, thereby negating the short-run stimulus to production and employment so that the economy moves from C₃ to C₂.