Figure 15-2

-Refer to Figure 15-2.Ceteris paribus,an increase in the number of workers and firms adjusting to having previously overestimated the price level would be represented by a movement from
A) SRAS₁ to SRAS₂.
B) SRAS₂ to SRAS₁.
C) point A to point B.
D) point B to point A.

Question

Figure 15-2
 
-Refer to Figure 15-2.Ceteris paribus,an increase in the number of workers and firms adjusting to having previously overestimated the price level would be represented by a movement from
A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A.

Quizplus · Accepted Answer

An increase in the number of workers and firms adjusting to having previously overestimated the price level would lead to lower costs of production and a shift in the SRAS curve to the right, from SRAS₁ to SRAS₂. This would result in an increase in real GDP and a decrease in the price level, represented by a movement from point A to point B.

Figure 15-2 -Refer to Figure 15-2.Ceteris Paribus,an Increase in the Number of in the Number