Consider the accompanying diagram and fill in the blanks in the paragraph below.
Suppose the economy is currently at Point B in the diagram. The classical process in which the economy would return to its long-run level of output is as follows: since
is/are flexible, it/they would
in the face of a shortage of labor causing the
to shift left. This process would occur until the economy reaches a new long-run equilibrium at
with a price level of