Assuming the Economy Represented in the Graph Shown Is Currently

Multiple Choice

Assuming the economy represented in the graph shown is currently at point B, if the government does nothing, then eventually:

A) SRAS will shift to the right, and the economy will have Y₃ output with lower prices.
B) SRAS will shift left, and the economy will experience stagflation.
C) LRAS will shift left, until lower equilibrium output is reached with lower prices.
D) the entire economy will collapse.