Use the Following to Answer Questions

Use the following to answer questions :
Figure: Monetary Policy and the AD-SRAS Model
-(Figure: Monetary Policy and the AD-SRAS Model) Look at the figure Monetary Policy and the AD-SRAS Model. If the economy is at point h because of an open market purchase by the Federal Reserve and no further monetary policy is implemented, in the LONG run nominal wages will _____, SRAS will shift _____, real GDP will _____, and the price level will _____.

A) increase; to SRAS'; decrease; increase
B) increase; to SRAS'; increase; decrease
C) decrease; farther to the right; decrease; increase
D) decrease; to SRAS'; increase; decrease

Correct Answer:

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