The diagram below shows the aggregate demand curves (AD) and short-run aggregate supply curves (SRAS) for an economy.
Which one of the following combinations of events is most likely to have caused the shift from A$D_1$ to AD$_2$ and the shift from SRAS$_1$ to SRAS$_2$?
1 )
A fall in commodity prices and a fall in savings
2 )
A fall in money wages and an increase in imports
3 )
An increase in the budget deficit and a fall in productivity
An increase in VAT and an increase in income tax
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