The diagram shows the AD /AS curves for an economy.
Which government action is most likely to cause the equilibrium position to move from X to Y?
1 )
an increase in the exchange rate that makes locally produced goods less price-competitive, both at home and abroad
an increase in government spending on infrastructure that increases the production potential of the economy
3 )
an increase in interest rates that increases the cost of borrowing
4 )
an increase in real wages of labour
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