The diagram below shows two aggregate demand curves (AD) and two long-run aggregate supply curves (LRAS) for an economy. The economy’s initial equilibrium point is at E$_1$.
All other things being equal, which one of the following combinations of macroeconomic policies, A, B, C or D, is most likely to have moved the economy to its new equilibrium point at E$_2$?
1 )
A
B
3 )
C
4 )
D
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