-Refer to the Above Diagram

Multiple Choice

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

A) increase real output from Q_f to Q₂.
B) change aggregate supply from AS₂ to AS₁.
C) decrease real output from Q₂ to Q₁.
D) not change the level of real output.