The economy is initially at long-run equilibrium.The import price of theraw materials it uses for production nowfalls due to a worldwide over-supply. Select the correct statement below:

a) In the short run, the short-run aggregate supply curve shifts right. In the long run, the price level returns to its pre-shock value, the output returns to its potential, and real wages increase.

b) In the short run, theaggregate demandcurveshiftsleft. In the long run,thepricelevelreturns to itspre-shock value, the output returns to its potential, and real wages increase.

c) In the short run,the aggregate demand curve shifts right. In the long run, the price level returns to its pre-shock value, theoutput returns to itspotential, and real wages do not change.

d) In the short run,the short-run aggregate supply curve shifts right. In the long run, the price level returns to its pre-shock value, the output returns to its potential, and real wages do not change.

e) In the short run, theaggregate demandcurveshiftsright. In the long run,thepricelevelreturns to itspre-shock value, the output returns to its potential, and real wages increase.