In the dynamic model of AD-AS in the diagram to the right, if the economyis at point A in year 1 and is expected to go to point B in year 2, and theFederal Reserve pursues no policy, then at point BOA. there is pressure on wages and prices to fall.B. the unemployment rate is greater than the natural rate ofunemployment.OC. incomes and profits are falling.OD. firms are producing above capacity.Price level104100LRAS, LRAS10Real GDPAD₁11:11.3SRAS₁SRAS₂AD₂

In AD/ AS graph, a rightward shift or increase in Aggregate demand will make output to rise along…

In the dynamic model of AD-AS in the diagram to the right, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B OA. there is pressure on wages and prices to fall. OB. the unemployment rate is greater than the natural rate of unemployment. OC. incomes and profits are falling. OD. firms are producing above capacity.

In the dynamic model of AD-AS in the diagram to the right, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B OA. there is pressure on wages and prices to fall. OB. the unemployment rate is greater than the natural rate of unemployment. OC. incomes and profits are falling. OD. firms are producing above capacity.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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