Use the table below to answer the following questions.
Table 10.3.3

-Refer to Table 10.3.3.When the economy is at its short- run macroeconomic equilibrium,
A)potential GDP will eventually increase.
B)the unemployment rate is below the natural unemployment rate.
C)the unemployment rate is above the natural unemployment rate.
D)the long- run aggregate supply curve will shift eventually shift leftward to return to full employment.
E)the money wage rate will rise.

Question

Use the table below to answer the following questions.
Table 10.3.3
 
-Refer to Table 10.3.3.When the economy is at its short- run macroeconomic equilibrium,
A)potential GDP will eventually increase. 
B)the unemployment rate is below the natural unemployment rate. 
C)the unemployment rate is above the natural unemployment rate. 
D)the long- run aggregate supply curve will shift eventually shift leftward to return to full employment. 
E)the money wage rate will rise.

Quizplus · Accepted Answer

In the short-run macroeconomic equilibrium, the economy is producing output at a level below potential GDP, which means there are unemployed resources (including labor). This results in an unemployment rate that is above the natural unemployment rate. The long-run aggregate supply curve may shift over time, but this does not necessarily mean that it will shift leftward to return to full employment. The money wage rate may or may not rise, depending on various factors.

Use the Table Below to Answer the Following Questions