Use the Aggregate Supply/aggregate Demand Model in Figure 13

Multiple Choice

Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario. The United Auto Workers were able to negotiate a contract for higher wages and better benefits. The economy initially moves from point ________ to point ________; eventually the economy returns to the steady state at point ________.

A) c; d; a
B) a; d; a
C) c; a; b
D) b; a; c
E) Not enough information is given.