Refer to Exhibit 4. If the economy is currently in a recession, represented by point B in Exhibit 4, what action should policymakers take to restore output to its natural long-run level?

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Reduce aggregate demand by shifting it leftwardDecrease short-run aggregate supply by shifting it leftwardIncrease aggregate demand by shifting it rightwardIncrease short-run aggregate supply by shifting it rightwardMaintain current policy without changes

Explanation

When the economy is in a recession (point B), output is below its natural long-run level. To return output to this natural rate, policymakers should stimulate the economy by increasing aggregate demand, which involves shifting the aggregate demand curve to the right.