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Refer to the economy shown in the graph to the right. Suppose that there is an increase in wages.The short-run effect of this change on the economy isA.a leftward shift of the SRAS curve, and cost-push inflation.B.a leftward shift of the AD curve, and demand-pull inflation.C.a rightward shift of the SRAS curve, and cost-push inflation.D.a rightward shift of the AD curve, and demand-pull inflation.E.none; changes in prices have no effect on the economy in the short run.
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