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Use the following to answer questions:
Figure: Policy Alternatives Use the following to answer questions: Figure: Policy Alternatives   -(Figure: Policy Alternatives)  Refer to Figure: Policy Alternatives. Assume that the economy depicted in panel (a)  is in short-run equilibrium with AD<sub>1</sub> and SRAS<sub>1</sub>. If the economy is left to correct itself: A)  real interest rates will fall, which will shift SRAS rightward. B)  lower wages will result in a gradual shift from SRAS<sub>1</sub> to SRAS<sub>2</sub>. C)  long-run equilibrium will be established at Y<sub>P</sub> and P<sub>3</sub>. D)  the aggregate demand curve will shift leftward.
-(Figure: Policy Alternatives) Refer to Figure: Policy Alternatives. Assume that the economy depicted in panel (a) is in short-run equilibrium with AD1 and SRAS1. If the economy is left to correct itself:


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