Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
Figure: Inflationary and Recessionary Gaps
-(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. If the economy is in short-run equilibrium at Y₁ in panel (b) , a contractionary policy to bring the economy back to potential output at Y_P would attempt to shift the:

A) SRAS to the left.
B) LRAS to the left.
C) aggregate demand curve to the left by decreasing aggregate demand.
D) aggregate demand curve to the right by increasing aggregate demand.