Use the figure below to answer the following question(s) .
Figure 9-2
-Which of the following is true for the economy depicted in Figure 9-2?
A) Potential output equals y1.
B) It would be impossible for this economy to achieve an output greater than y1.
C) When output y1 is achieved, the actual rate of unemployment will exceed the natural rate of unemployment.
D) When output y1 is achieved, the actual rate of unemployment will be less than the natural rate of unemployment.
Correct Answer:
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