at E₁₁ In the figure at right, if the economy is in equilibrium at then A. the economy is underutilizing its resources. OB. the economy is producing above its potential long-run equilibrium at full employment. OC. the economy is in a period of high inflation. OD. there is an inflationary gap in the economy.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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In the figure at right, if the economy is in equilibrium at E₁, then
A. the economy is underutilizing its resources.
OB. the economy is producing above its potential long-run equilibrium at full
employment.
O C. the economy is in a period of high inflation.
OD. there is an inflationary gap in the economy.
Transcribed Image Text:In the figure at right, if the economy is in equilibrium at E₁, then A. the economy is underutilizing its resources. OB. the economy is producing above its potential long-run equilibrium at full employment. O C. the economy is in a period of high inflation. OD. there is an inflationary gap in the economy.
Price Level
125
120
E₁
LRAS
E₂
SRAS
16
Real GDP per Year ($ trillions)
AD₂
AD₁
Transcribed Image Text:Price Level 125 120 E₁ LRAS E₂ SRAS 16 Real GDP per Year ($ trillions) AD₂ AD₁
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