Use the following to answer questions . Exhibit: AD-AS and the Inflation-Unemployment Cycle -(Exhibit: AD-AS and the Inflation-Unemployment Cycle) If the economy is in equilibrium at point 3, A) it will most likely stay there for an indeterminate period. B) the SRAS will most likely shift to the left because of firms and workers asking for higher prices and wages. C) it will move to point 5 because of a shift in the aggregate supply curve from SRAS₁ to SRAS₂. D) it will move to point 2 because the aggregate demand curve is likely to shift left in response to higher prices.

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When the economy is at point 3, it is likely experiencing higher inflation, leading firms and workers to demand higher prices and wages, causing the short-run aggregate supply (SRAS) to shift left.

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