The figure below shows short-run equilibrium in an aggregate demand-aggregate supply model.If the economy is currently producing Y1 level of output,_____.

A)potential output is less than actual output.
B)there is zero unemployment.
C)the price level will rise eventually.
D)aggregate supply will fall to restore equilibrium.
E)the actual unemployment rate is more than the natural rate.

Question

The figure below shows short-run equilibrium in an aggregate demand-aggregate supply model.If the economy is currently producing Y1 level of output,_____.

A)potential output is less than actual output. 
B)there is zero unemployment. 
C)the price level will rise eventually. 
D)aggregate supply will fall to restore equilibrium. 
E)the actual unemployment rate is more than the natural rate.

Quizplus · Accepted Answer

The Answer of The figure below shows short-run equilibrium in an aggregate demand-aggregate supply model.If the economy is currently producing Y1 level of output,_____.

A)potential output is less than actual output. 
B)there is zero unemployment. 
C)the price level will rise eventually. 
D)aggregate supply will fall to restore equilibrium. 
E)the actual unemployment rate is more than the natural rate.

The Figure Below Shows Short-Run Equilibrium in an Aggregate Demand-Aggregate