-Refer to Figure 13.9. In panel a) of the diagram, based on the economy's built-in adjustment process, over time:

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In panel a) of the diagram, if the economy is initially at a point where aggregate supply (AS) is greater than aggregate demand (AD), indicating a recessionary gap, the built-in adjustment process would typically involve a decline in wage rate growth and inflation. This reduction in wage rates and inflation would make production less costly for businesses, which in turn would shift the aggregate supply curve (AS₁) downward (or to the right) to intersect the aggregate demand curve (AD) at a new equilibrium point. This process helps the economy move towards full employment.