You're working on some econ homework with a classmate. Your homework has the following two scenarios:

Question One: What happens to $P^{**}$ and $Y^{**}$ in the long run if wages, on average, fall? Question Two: What happens to $P^{**}$ and $Y^{**}$ in the short run if technology improves?

And your friend puts the same answer for both questions.

Is she right or wrong? If she's wrong, why?

She is incorrect; in the long run, only prices will fall, with no change in real output.

Your friend is correct; the effects on $P^{**}$ and $Y^{**}$ are the same in both time frames.

She is incorrect; in the long run, only prices will rise, with no change in real output.

She is incorrect; one shifts the AS curve rightward and the other shifts the AS curve leftward.