Answer:
To return to its long-run equilibrium point, government should use expansionary fiscal policy.
Explanation:
Long run is the sufficient time period for wages and other input prices to change responding to change in the price level. Long-run aggregate supply curve shows the relationship between the price level and actual GDP (applied if all prices are flexible). Price can change but output cannot. "Long-run aggregate supply curve" (LRAS) is vertical or passes through a point because in long run, output is not related to the level of price.
An expansionary fiscal policy causes an increase in demand. This happens when the government spends increase and there is reduction in taxes.
