Panel (a) Panel (b) Price level Price level LRAS LRAS SRAS, SRAS, P3 .. . SRAS2 P3 P 2 P2 P 1 ...... P1 AD2 AD, AD Y1 YP Yz Y1 YP Yz Real GDP Real GDP Refer to Figure: Policy Alternatives. Assume that the economy depicted in panel (a) is in short-run equilibrium with AD ] and SRAS]. If the economy is left to correct itself: O A. real interest rates will fall, which will shift SRAS rightward. B. lower wages will result in a gradual shift from SRAS1 to SRAS2. O C. long-run equilibrium will be established at YP and P3. O D. the aggregate demand curve will shift leftward